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HomeMy WebLinkAbout12-15-2020 AgendaHOME OF PEUCM ISLAND PUBLIC NOTICE - POLICE PENSION BOARD VIRTUAL MEETING DECEMBER 15, 2020 THE POLICE PENSION BOARD WILL HOLD A REGULAR QUARTER MEETING TUESDAY, DECEMBER 15, 2020 AT 10:00 A.M. THE MEETING WILL BE CONDUCTED BY USING ZOOM TECHNOLOGY. THE PUBLIC CAN ACCESS THE MEETING VIRTUALLY VIA ZOOM BY FOLLOWING THE DIRECTIONS SHOWN AT THE BOTTOM OF THIS AGENDA. HOWEVER. THE PUBLIC IS ADVISED TO CHECK THE CITY WEBSITE FOR UP-TO-DATE INFORMATION ON ANY CHANGES TO THE MANNER IN WHICH THE MEETING WILL BE HELD AND THE LOCATION. AGENDA A. CALL TO ORDER Chairperson B. ROLL CALL Chairperson C. VOTE TO EXCUSE ABSENT BOARD MEMBER(S) Chairperson D. APPROVAL OF MINUTES: 1. September 15, 2020 Regular Quarterly Meeting Chairperson E. OLD BUSINESS 1. Approval of Payments: Ken Killgore, Plan Administrator a. Highland Capital - July to September - Value, Growth, ADR $ 10,944.31 b. Highland Capital - July to September -Fixed Income $ 3,106.94 C. Boston Partners - July to September $ 1,821.93 d. Fiera Capital - July to September $ 1,908.87 e. Renaissance - July to September $ 1,701.10 f. Brookfield Public Securities Group - July to September $ 434.27 g. Klausner, Kaufman, Jensen & Levinson - Sept./Oct./Nov. $ 3,610.00 h. City of Sebastian - Janet Graham 9/15/2020 Meeting $ 126.00 i. City of Sebastian - October to December $ 6,000.00 j. City of Sebastian - Annual Fiduciary Liability Insurance Policy $ 2,991.00 k. Salem Trust - July to September $ 4,025.00 2. Report on Foster & Foster Cyber Liability Insurance Coverage Ken Killgore, Plan Administrator F. PUBLIC INPUT Chairperson 1. The Public can submit questions and or comments to the Plan Administrator's email at kl lleorel7a.citvofsebastian.ore. Emails will be read aloud during this time. G. NEW BUSINESS 1. Presentation of October 1, 2020 Actuarial Report Douglas Lozen, Foster & Foster 2. Report from Investment Monitor/Continue Discussion on Search for Scott Owens, Morgan Stanley International Growth and Large -Cap Growth Managers/Discussion and Action on Setting the Expected Rate of Return 3. Report from Investment Manager - Highland Capital Todd Wishnia, Highland Capital H. LEGAL UPDATES - Klausner, Kaufman, Jensen & Levinson Bonni S. Jensen, Board Attorney 1. Status of Proposed City Ordinance Amending the Plan for New IRS Rules 2. Other Legal Matters I. BOARD MEMBER REPORTS AND COMMENTS Chairperson J. PLAN ADMINISTRATOR REPORTS AND COMMENTS Ken Killgore, Plan Administrator 1. Notification of Intent to Enter DROP from Sergeant Steven Marcinik 2. Review Budget Report and Annual Calendar of Board Activities 3. Other Administrative Matters K. NEXT SCHEDULED QUARTERLY MEETING: March 16, 2021 Chairperson ADJOURN Please note: In accordance with Florida Statue 286.0105: any person who desires to appeal any decision at this meeting will need a record of the proceedings and for this purpose may need to ensure that a verbatim record of the proceedings is made which includes the testimony and evidence upon which the appeal is based. In accordance with Florida Statute 286.26: Persons with disabilities needing assistance to participate in any of these proceedings should contact the Administrative Services Department at least 48 hours prior to the meeting at kkillgorena.citvofsebastian.org or telephone 772-388-8205. Please click the link below to join the webinar: hggZ,I/us0,7we b.zoom.us/i/83090604075?nwd=WG kxZGxtSWV1cTBFN2ZpcUMvcFFYUT09 Meeting ID: 830 9060 4075 Passcode:509542534 One tap mobile +13017158592„83090604075#,..... 0#„509542534# US (Washington D.C) +13126266799„83090604075#...... 0#„509542534# US (Chicago) Dial by your location +1 301 715 8592 US (Washington D.C) +1312 626 6799 US (Chicago) +1929 436 2866 US (New York) +1253 215 8782 US (Tacoma) +1346 248 7799 US (Houston) +1669 900 6833 US (San Jose) DRAFT CITY OF SEBASTIAN POLICE PENSION BOARD MINUTES OF REGULAR QUARTERLY MEETING SEPTEMBER 15, 2020 Call to Order -- Acting Chairman Tim Wood called the meeting to order at 10:07 a.m. II. Roll Call Present � via Zoom technology) Board Members: Tim Wood, Acting Chairman Paul Williamson Andrea Ring Albert lovino (late arrival) Also Present {via Zoom technology) Bonni Jensen, Klausner, Kaufman, Jensen & Levinson, Attorney for the Board of Trustees Ken Killgore, Plan Administrator Cynthia Watson, Human Resources Manager Andy Mcllvaine, Morgan Stanley Scott Owens, Morgan Stanley Todd Wishnia, Highland Capital Barbara Brooke -Reese, MIS Manager Janet Graham, Technical Writer III. Vote to Excuse Absent Board Member Acting Chairman Wood announced that Jason Gillette is excused from today's meeting. He called for a motion to excuse Mr. Gillette. A motion excusing Jason Gillette from today's meeting was made by Mr. Williamson, seconded by Acting Chairman Wood, and approved unanimously via voice vote. IV. Approval of Minutes Acting Chairman Wood asked if there were any changes or corrections to the Minutes of June 16, 2020. Ms. Jensen asked that a correction be made on Page 2, Item B, in the third line of the paragraph beginning with "Ms. Mindy Johnson" where it states BMI Trust, that should be TMI Trust. There being no other changes, Acting Chairman Wood called for a motion to approve the Minutes as corrected. A motion approving the Minutes with the above -noted correction was made by Mr. Williamson, seconded by Acting Chairman Wood, and approved unanimously via voice vote. r-� t — f POLICE PENSION BOARD MINUTES OF REGULAR MEETING OF SEPTEMBER 15, 2020 V. Old Business PAGE 2 A. Approval of Payments -- Ken Killgore, Plan Administrator i. Highland Capital -- April to June -- Value, Growth ADR $ 9,973.89 ii. Highland Capital -- April to June -- Fixed Income 3,073.07 iii. Boston Partners -- April to June 1,621.22 iv. Fiera Capital -- April to June 1,672.34 V. Renaissance -- April to June 1,570.58 vi. Brookfield Public Securities Group -- April to June 492.69 vii. Morgan Stanley Consulting -- April to June 3,375.00 viii. Klausner, Kaufman, Jensen & Levinson -- June to July 1,740.00 ix. City of Sebastian -- Janet Graham 4-24-2020 Meeting 108.00 X. City of Sebastian -- Janet Graham 6-16-2020 Meeting 162.00* A. City of Sebastian -- July to September 6,000.00 xii. Salem Trust -- April to June 7,465.00 *Mr. Killgore added that there is an additional invoice from Janet Graham that was not put on the list in the agenda. The invoice was paid to Ms. Graham, but the City needs to be reimbursed for this expense. He stated there is nothing else different on that list. Motion to approve the payments as listed above was made by Acting Chairman Wood, seconded by Mr. Williamson, and approved unanimously via voice vote. B. Approval of Budget Amendment for FY2019-2020 Mr. Killgore referred to the attachment E-2 in the Agenda packet, and he explained that this document shows the adjustments to the current year budget numbers to tie in with the actuals. There were no changes to the total budget, but this report shows where the additional funds were allocated. There was discussion among the Board members and Mr. Killgore regarding the report, and Mr. Killgore asked for a motion to approve the amendment. A motion approving the budget amendment as set forth in attachment E-2 was made by Acting Chairman Wood, seconded by Mr. Williamson, and approved unanimously via voice vote. ZJI-;L- POLICE PENSION BOARD PAGE 3 MINUTES OF REGULAR MEETING OF SEPTEMBER 15, 2020 VI. Public Input -- None Ms. Jensen asked if there were any emails received by City Staff regarding the Pension Plan. Mr. Killgore stated he had not received any, nor is he aware that anyone else received any. VII. New Business A. Approval of Budget for FY 2020-2021 Mr. Killgore reviewed Exhibit G-1 which is included in today's agenda packet. He explained that the investment expenses have gradually increased. The projected budget is $224,700.00. Mr. Killgore then called for a motion to approve. A motion to approve the projected budget for the fiscal year 2020-2021 was made by Mr. Williamson, seconded by Acting Chairman Wood, and approved unanimously via voice vote. B. Report from Investment Monitor/Continue Discussion on Manager Search Mr. Scott Owens from Morgan Stanley made a PowerPoint presentation (SEE ATTACHED) during which he reviewed in depth how the investments performed for the quarter ending June 30th as opposed to the previous quarter. He stated the account was up over 15% for the quarter, which equates to a little over $2 million in gains. The PowerPoint covered many facets of the investment market and how they affect this Pension Fund, and Mr. Andy Mcllvaine further delineated the information in the PowerPoint. Mr. Owens and Mr. Mcllvaine gave an in-depth explanation regarding master limited partnerships (MLPs) and whether these MLPs should be kept as they are. Mr. Owens then asked for questions or comments from the Board members regarding MLPs. There were several questions and comments among the Board members, Mr. Owens, Mr. Mcllvaine, and Ms. Jensen on this subject. It was the consensus of the Board members that they defer to the Investment Monitor regarding MLPs. Mr. Williamson asked regarding rebalancing the Plan's large -cap allocations. Mr. Owens explained that the large -cap allocation is actually outside the range, so it is required that it be rebalanced. He further explained that it was desired to have an asset allocation study first so that it is known what to rebalance to. After protracted discussion, Mr. Owens' recommendation would be to narrow it down to between Mix 2 and Mix 3. He would choose the higher return, which is Mix 3. Mr. Mcllvaine explained, if it is decided to go to Mix 2 or 3 with infrastructure, this would require that the Plan's Investment Policy Statement be amended to include infrastructure. There is a 31-day waiting period after the new Investment Policy Statement is filed before being able to invest in that asset class. Mr. Owens stated that they will make sure that the Plan is compliant with everything that is required. Mr. Killgore called for a motion. POLICE PENSION BOARD PAGE 4 MINUTES OF REGULAR MEETING OF SEPTEMBER 15, 2020 A motion that the investment managers move the Plan to the proposed Mix 3 was made by Mr. Williamson, seconded by Acting Chairman Wood, and approved unanimously via voice vote. Mr. Owens and Mr. Mcllvaine reviewed the Investment Policy Statement as it relates to infrastructure and what changes will need to be made to the Investment Policy Statement. Mr. Owens stated that the Board will have to pick a manager to invest in those assets. He also stated that their analyst will make the changes to the Policy Statement and will send it over to Mr. Killgore today, who can send it to the Chair for signature. Once Mr. Killgore lets Morgan Stanley know when it has been filed with the City via the City Manager, there will be a 31-day waiting period before those changes can be implemented. Mr. Mcllvaine gave a brief educational review of what is included in infrastructure, such as tunnels, bridges, etc., and what sorts of companies invest in infrastructure. Regarding the manager search, Mr. Mcllvaine reviewed several managers and compared them to each other. Mr. Owens pointed out the difference between Lazard and the other managers that were studied, and he recommends Lazard and explained why. It was the consensus of the Board to go with Lazard. A motion to approve Lazard as the Pension Plan's infrastructure manager was made by Mr. Williamson, seconded by Acting Chairman Wood, and approved unanimously via voice vote. Mr. Owens recommended tabling the searches for the international growth and large -cap growth managers. At the next meeting, he will bring the information. If the managers are not performing as expected, he recommends doing a manager search. If they are outperforming, then perhaps it can be tabled again. It was the consensus of the Board that the search for international growth and large -cap growth managers be tabled until the next meeting. C. Report from Investment Manager -- Highland Capital Todd Wishnia, Highland Capital, agreed with the market recap and economic summary by Mr. Owens and Mr. Mcllvaine. One thing he wanted expand on related to what Mr. Owens said about the dispersion with value and growth. Looking at the numbers from August 31 st, growth is up 44.3%, and value is basically flat at 82 basis points. That is a difference of 43.5% between growth and value. That will come back, but no one knows just when. Some changes were made at the end of the quarter in the value and the growth index. Every year the indices rebalance, and his company is trying to keep in line with the growth index. There is a little more technology in the value index now. Regarding a question Mr. Williamson asked about the 15-year number, Highland is about 120 basis points below the index. This is mainly because two periods--2007-2008 and 2015- QRAFT POLICE PENSION BOARD PAGE 5 MINUTES OF REGULAR MEETING OF SEPTEMBER 15, 2020 2016--were pretty large underperformers which contributed substantially to the underperformance over a 15-year period. He reviewed that last quarter Highland changed the portfolio manager, but they still work as a team. The portfolio was tweaked somewhat and became more of a growth portfolio. He called for questions/comments from anyone concerning his presentation. Mr. Owens asked, since the Investment Policy Statement says that any manager cannot have more than 10% in one holding and Apple is above benchmark, is Highland going to pare that back so that the Plan is compliant with the Investment Policy Statement. Mr. Wishnia stated yes, they will absolutely do that. Mr. Owens clarified that that is not a statutory requirement. One of the things that can be done, if the Board is in agreement, is to actually take that language out of the Investment Policy Statement so that the managers can at least have benchmark weights in some of the stocks that they decide to purchase. If the Board approves, then the managers will not have to pare those back. Mr. Williamson asked, if one stock goes up to 15%, is it desirable to have 15% in one stock. Mr. Owens stated that it would only be 15% with that particular manager, which would be very minimal in comparison to the whole portfolio. It does not pertain to the whole portfolio; it just pertains to the manager of that particular stock. Mr. Owens also stated there is an overriding rule for the whole portfolio, which is statutory, that says the portfolio cannot have more than 5% in any one manager. Acting Chairman Wood called for a motion. A motion to amend the language that takes the 10% cap off any one holding within any one portfolio was made by Mr. Williamson, seconded by Ms. Ring, and approved unanimously via voice vote. Mr. Owens stated he will include that language in the Investment Policy Statement and will get it sent to Mr. Killgore today. Vill. Legal Uvdates A. Report on Discussions with Foster and Foster Regarding Cyber Liability Insurance Ms. Jensen stated, as a follow-up to the last meeting the Board had discussed that Foster and Foster was maintaining their cyber insurance at $1 million. They had sent a letter earlier this year regarding the changes they had made to their systems to increase them in order to be more secure in the event of a cyber breach. So they have put into place, working with adherence to the National Institute of Standards in Technology, cyber security framework that provides framework for organizations to better manage and reduce cyber security risk. They have created a document that is available to this Board that describes the measures that Foster and Foster has taken to come into compliance. POLICE PENSION BOARD PAGE 6 MINUTES OF REGULAR MEETING OF SEPTEMBER 15, 2020 They have also begun to go through the process of the SOC 2 Audit, which will provide them with a level of confidence and will test their cyber security. They also have that $1 million coverage. Ms. Jensen questions whether that $1 million coverage is sufficient. However, Foster and Foster has done lots of things in addition to purchasing cyber liability insurance to make sure that they are compliant. She is continuing to work with them to see if they can increase the amount of insurance they have up to the $2 million level that this Board has requested. She thinks that the Board can move forward from this point on the basis of the information that it has been provided. B. Other Legal Matters Ms. Jensen reviewed that the Public Safety Officer Benefit is a disability and death benefit paid by the federal government in the event that a police officer is catastrophically injured or dies in the line of duty. It is a $365,000.00+ amount of money that goes to the member or his/her family. That benefit has been expanded to include COVID as a presumed in - line -of -duty death or disability that disables an individual from performing his/her function. There are some standards that the individual would need to meet, the hardest one being that their family did not make them sick. It is a recognition of the exposure that police officers and others are having across the country and that the federal government is protecting the frontline individuals who are sent to address problems that the general public do not have to do. Ms. Jensen opined that there will probably be a virtual conference scheduled for next year in order to provide more education during this particular time. She suggested that, if the pandemic continues, a special session should probably be scheduled in order to provide this Board with some education. She noted that there is a requirement in the Plan's investment policy guidelines and in its administrative rules that the Board does get some continuing education. Mr. lovino and Ms. Watson asked if Ms. Jensen would send them the information regarding this education conference. Ms. Jensen stated she would send them the information that she has. IX. Board Member Reports and Comments Mr. lovino reminded everyone that today is a big day in Sebastian and asked those members who live in Sebastian to please get out and vote. X. Plan Administrator Reports and Comments A. Status of Proposed City Ordinance Amending the Plan for New IRS Rules Mr. Killgore stated that he has not submitted that to Foster and Foster at this point. He will get that out shortly to them so that they can do the actuarial impact study. POLICE PENSION BOARD PAGE 7 MINUTES OF REGULAR MEETING OF SEPTEMBER 15, 2020 B. Receipt of Annual State Contribution Mr. Killgore stated the City will get $208,645.00 as compared to last year of $198,770.00. C. Review of Annual Calendar of Board Activities. Mr. Killgore stated he has nothing to present that has not already been accomplished at this point in the year. D. Meeting Dates for FY2021 are March 16, June 15, September 21, and December 14 Mr. Killgore asked the Board members to note these dates on their calendars. E. Other Administrative Matters -- None XI. Next Scheduled Quarterly! Meetinq: December 15, 2020 XII. Adjourn There being no further business, the meeting was adjourned by Acting Chairman Wood at 12:35 p.m. M Jg Date: �>1-7 Hihland Capital MANAGEMENT, LLC October 5, 2020 MANAGEMENT FEE: 9/30/2020 Portfolio Value: Invoice Number: 26222 SEBASTIAN POLICE OFFICERS' RETIREMENT Quarterly Fee Based On: $ 8,755,445 @ 0.50% per annum Quarterly Fee: For the Period 7/l/2020 through 9/30/2020 cco nt (sebastO1) SEBASTIAN POLICE OFFICERS' RETIREMENT VALUE (sebasti3) SEBASTIAN POLICE OFFICERS' RETIREMENT GROWTH (sebasti4) SEBASTIAN POLICE OFFICERS' RETIREMENT ADR Total Mailing Check: Highland Capital Management, LLC 6075 Poplar Ave, Suite 703 Memphis, IN 38119 $ 10,944.31 $ 8,755,445.25 $ 10,944.31 Paid by Debit Direct ($ 0.00) Please Remit $ 10,944.31 Wiring Instructions: Account Value Ouarterly Fee $ 3,664,390.66 $ 4,580.49 $ 4,370,273.37 $ 5,462.84 $ 720,781.22 $ 900.98 $ 8,755,445.25 $ 10,944.31 Contact: srunvan(n hiahlandcaD.com *****Note new checking account number******* Hiihland Capital MANAGEMENT, LLC October 5, 2020 Invoice Number: 26190 MANAGEMENT FEE: SEBASTIAN POLICE OFFICERS' RETIREMENT FIXED INCOME 9/30/2020 Portfolio Value: $ 4,142,584.69 Quarterly Fee Based On: $ 4,142,585 @ 0.30% per annum $ 3,106.94 Quarterly Fee: $ 3,106.94 For the Period 7/1/2020 through 9/30/2020 Mailing Check: Highland Capital Management, LLC 6075 Poplar Ave, Suite 703 Memphis, TN 38119 Paid by Debit Direct ($ 0.00) Please Remit $ 3,106.94 Wiring Instructions: Contact: srunvan(&hiahIandcan.coin *****Note new checking account number******* L;L 101a9ldvd�e CI � ostonlPartners Ken Killgore City of Sebastian 1225 Main Street Sebastian, FL 32958 Invoice Date: 09/30/2020 Invoice Number: 20200930-690-A Billing Portfollo(s): 00844 - City of Sebastian Police Officers' Retirement System Billing Period: 07/01 /2020 to 09/30/2020 SUMMARY FOR INVESTMENT SERVICES Current Period Amount Due: $ 1,821.93 Current QUARTEREND Fee Invoice Period Due 30-60 Days 60-90 Days Over 90 Days City of Sebastian Police Officers' Retirement 20200930-690-A 1,821.93 System Fowl writ Due 1,1321,93 Please contact James Vitelli directly at 212-908-0149 with any billing inquiries. As always, you may also direct any questions to your Relationship Manager We would appreciate receiving your payment along with the remittance slip within 30 days of receipt of this Invoice. Total 1,821.93 WIRE / TRANSFER FUNDS TO: JP Morgan Chase; ABA #021000021; ACCT #066-654610 REFERENCE: Boston Partners Ref Acct #: 00844 M/UL REMITTANCES TO: Accounts Receivable Boston Partners One Grand Central Place, 60 East 42nd Street, Suite 1550 New York, NY 10165 �/ G Email jvitelli@boston-partners.com Thank You eriod Rule - Custom (USD) City of Sebastian Police Officers' Retirement System - 00844 Monthly Values 06/30/2020 Market Value 07/31/2020 Market Value 08/31/2020 Market Value 09/01/2020 Capital Change 09/30/2020 Market Value Adjusted Input Annual Fee Schedule (IMFEE - USD) 0.00 to 25,000,000.01 and above Quarterly Fee Calculation (IMFEE - USD) 728,772.70 100.00 BPS Fee Detalls: Total IMFEE (00844) Fee Total: Invoice Summary Fee Totals: 25,000,000.00 668,422.89 697,826.77 736,415.41 133,645.00 835,728.94 * 90 / 360 = Schedule Total: Fee Total For IMFEE: Total Amount Due: 668,422.89 697,826.77 736,415.41 835,728.94 $ 728,772.70 100.00 BPS 80.00 BPS 1,821.93 $ 1,821.93 1,821.93 $1,821.93 1,821.93 $ 1,821.93 i � I �-, -)- 1 October 16, 2020 Ken Kiligore 1225 Main Street Sebastian, FL 329SS City of Sebastian Police Officer's Retirement System - 3040002573 FIERA CAPITAL INC. SUMMARY OF MANAGEMENT FEES For The Period July 1st thru September 30th, 2020 Portfolio Value as of 09-30-20 $ 1,018,061.39 1,018,061 @ 0.75 % per annum 1,908.87. Quarterly Management Fee $ 1,908.87 TOTAL DUE AND PAYABLE $ 1,908.87 As per SEC Rule 206(4)-2, we urge you to compare this report with your custodian statements. It is the client's responsibility to verify the accuracy of the computation. The custodian will not do an independent verification of the accuracy of the computation of fees. ACH Instructions: BMO Harris Bank 111 West Monroe Chicago, IL 60603 ABA Number: 071000288 Swift Code: HATRUS44 Account Name: Fiera Capital Inc. Account Number: 2553816 To pay by check: Payable to Fiera Capital Inc. Attn: Myron Charas 10050 Innovation Dr, Suite 120 Dayton, OH 45342 Billing inquiries should be directed to: Myron Charas and Bill ingFCl@fieracapital.com 937-388-1437 enaissxice� hivestment Management October 02, 2020 Mr. Kenneth W. Killgore Administrative Services Director City of Sebastian 1225 Main Street Sebastian, FL 32958 Billing Period: FROM 07/01/2020 TO 09/30/2020 Custodian Account No: 0740001532 Account #: IE0496 - City of Sebastian Police Officers Retirement System Portfolio Value ................................................... Amount Due, PAYABLE UPON RECEIPT: ........................... FEE CALCULATION '(Rate x Portfolio Value) x (# of days in quarter / # of days in year) Rate ADnlied: Fir Assets Under Manauement Amount Due 0.6500 % On the remainder: 1,041,141 1,701.10 Total Fee: 1,701.10 $1,041,141.03 $1,701.10 Please compare this fee bill prepared by our firm to your custodial account statement for any discrepancies. Minor variations may occur because of reporting dates, accrual methods of interest and dividends, and other factors. Your custodial statement is the official record of your account. If you are not receiving statements from your custodian at least quarterly, if there have been any changes in your financial situation, investment objectives, or if you wish to initiate or modify any reasonable restrictions on the management of your account, please notify Mary Meiners at 513-723-4554 or mcm@reninv.com. P �I /o Return this section with your fee to the address below or in the enclosed envelope: RENAISSANCE INVESTMENT MANAGEMENT 3551 Solutions Center #773551 Chicago, IL 60677-3005 Acct: IE0496 Custodian Account No: 0740001532 50 EAST R1V1?RC: ENTRR 130 U1,EV AItD - SUIT F. 12011 f COYINGTON, KY 41011 0 800.837.3863 a 513.723.4500 . FAX .513.723.4512 . www.rcninv.cnm � � � rookfield City of Sebastian Police Officers Retirement System 3040002617 1225 Main Street Sebastian, FL 32958 Involve Daft 1tl�vie� �lurn6� Billing Period Billing Portfolios CCs: Larry Castrovinci Jonathan Frankovich Timothy•Haugaard Holly Ng Scott Owens BIM MLP SMA Victoria Volgende SUMMARY FOR INVESTMENT MANAGEMENT SERVIC - -- - 10/28/2020 20200930-350-A 07/01/2020to 09/30/2020 SEBASTIAN - City of Sebastian Police Officers Retirement System Tom[ Amount alb * See attached worksheet for calculation details E-Mail E-Mail E-Mail E-Mail E-Mail E-Mail E-Mail PAYMENT DUE UPON RECEIPT PLEASE INCLUDE INVOICE # WITH REMIT PAYMENT JPMorgan Chase Bank, NA Bank Account # 907-153925265 ABA # 021000021 Account Name Brookfield Public Securities Group LLC $434.27 Should you have any questions regarding this invoice, please email BPSGaccountsreceivable@brookfield.com Page 1 of 2 C%i Inver ome 10/28/2020 h"ce Number 20200930-350-A 1 Period Market Value (USD) 09/30/2020 City of Sebastian Police Officers Retirement System - SEBASTIAN Market Value 345,523.48 Total Adjusted Market Values $345,523.48 Quarterly Fee Calculation (Investment Management Fee - USD) Billable Assets Billable Days Fee 345,523.48 50.000 92/366 43427 Invoice Summary 09/30 Fee Total for Investment Management Fee 434.27 Total Fee 434.27 TOW Amouint Due$434.27 Page 2 of 2 lausner, Kaufinan, Jensen & Levinson A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916-1202 www.klausnerkaufman.com Fax (954) 916-1232 Tax I.D.: 454083636 SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM September 30, 2020 Attn: KEN KILLGORE Bill # 27002 1225 MAIN STREET SEBASTIAN, FL 32958 CLIENT: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM :170042 MATTER: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM 174042 Professional Fees Date Attorney Description Hours Amount 09/14/20 BSJ PREPARE FOR MEETING; REVIEW 0.50 212.50 AGENDAAND MEETING BACK UP, INCLUDING MINUTES 09/15/20 BSJ ATTEND VIRTUAL MEETING 2.70 1,147.50 09/15/20 BSJ TELEPHONE CALL WITH DOUG LOZEN 0.40 170.00 REGARDING CYBER INSURANCE;REVIEW AND RESPOND TO EMAIL FROM PAUL WILLIAMSON 09/15/20 PARA PREPARATION OF MEETING 1.00 125.00 MATERIALS FOR UPCOMING MEETING. 09/16/20 BSJ EMAIL WITH DOUG LOZEN REGARDING 0.20 85.00 CYBERINSURANCE Total for Services 4.80 $1,740.00 CURRENT BILL TOTAL AMOUNT DUE Past Due Balance AMOUNT DUE $ 1,740.00 M $1,740.00 lausner, Kaufinan, Jensen & Levinson A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916-1202 www.kiausnerkaufinan.com Fax (954) 916-1232 Tax I.D.: 45-4083636 SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM November 30, 2020 Attn: KEN KILLGORE Bill # 27402 1225 MAIN STREET SEBASTIAN, FL 32958 CLIENT: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM :170042 MATTER: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM :170042 Professional Fees Date Attorney Description Hours Amount 11/12/20 BSJ REVIEW AND RESPOND TO EMAIL 0.70 297.50 FROM MANNY ANON REGARDING IRS AMENDMENT LANGUAGE REGARDING DELEGATION OF POWER TO KEEP PLAN IN COMPLIANCE BY POLICY Total for Services 0.70 $297.50 CURRENT BILL TOTAL AMOUNT DUE $ 297.50 Past Due Balance 1,512.50 AMOUNT DUE $1,870.00 lient: SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM Matter: 170042 - SEBASTIAN POLICE OFFICERS' RETIREMENT October 31, 2020 Page 2 Professional Fees Continued... Date Attorney Description Total for Services CURRENT BILL TOTAL AMOUNT DUE Past Due Balance AMOUNT DUE Hours Amount 5.00 $1,572.60 $ 1,672.50 1,740.00 $3,312.50 JANET M. GRAHAM 97 OVERLOOK DRIVE SEBASTIAN, FL 32976 SEPTEMBER 28, 2020 INVOICE FOR SEPTEMBER 2020 R_R1_7[l7!] Budget Advisory -Committee 4-pages----$-72-90< 9-4<2020- , Natural Resoume-s-Beard 5 pages---99-80 9-2-2020 PBA Union Negotiat' 3 pages - -54.00- 9-2-2020 PEA Union Negotiations— 2 pages- ---36:0e 9-15-2020 Police Pension Board 7 pages 126.00 9-'17--202 ission 11 pag g_2n n Parks and Recreafinn Corn�?1 mittee 12 pages- Total UNOF HOME OF PELICAN ISLAND City of Sebastian 1225 Main Street Sebastian, Florida 32958 INVOICE TO: Sebastian Police Pension Trust Fund INVOICE: 11225 Main Street Date: 10/8/2020 Sebastian, FL 32958 Amount: $6,000.00 AMOUNT DESCRIPTION DUE Agreement With City of Sebastian Dated June 14, 2017 for Plan Administrator Services for October, November and December 2020. $6,000.00 PAYMENT DUE UPON RECEIPT. PLEASE RETURN COPY OF INVOICE WITH PAYMENT THANK YOU. TOTAL AMOUNT DUE $6,000.00 Remit To: City of Sebastian - Attention Ken Killgore jor `��(��"0-0 1225 Main Street Sebastian, Florida 32958 /O/ ` an-V Account Code 001501-349620 ana� HOME OF PELICAN ISLAND City of Sebastian 1225 Main Street Sebastian, Florida 32958 INVOICE TO: J Sebastian Police Pension Trust Fund 1225 Main Street Sebastian, FL 32958 1 DESCRIPTION INVOICE: Date: Amount: Reimbursement for City payment of fiduciary liability insurance premium on behalf of the Police Pension Board for the one year period beginning November 1, 2020. PAYMENT DUE UPON RECEIPT. PLEASE RETURN COPY OF INVOICE WITH PAYMENT THANK YOU. TOTAL AMOUNT DUE 12/8/2020 $2,991.00 AMOUNT DUE $2,991.00 $2,991.00 Remit To: City of Sebastian - Attention Ken Killgore a� 9 q A CQ-O 1225 Main Street Sebastian, Florida 32958 i/� Account Code 001501-349620 RAVELEM LSJ INSURANCE AGENCY INC 100 E SYBELIA AVE 375 MAITLAND FL 32751 04087 -L6 Page 01 of 03 Account Bill Iz/y Account No. 9860K9214 Date of This Bill 11/11/20 TOTAL BALANCE $3 A91 . 00 MINIMUM DUE $3,091.00 CITY OF SEBASTIAN POLICE OFFICERS' RETIR 1201 MAIN STREET SEBASTIAN FL 32958 PAYMENT MUST BE RECEIVED BY, DECEMBER 01, 2020 Account Name CITY OF SEBASTIAN POLICE OFFIC ACCOUNT BILLING SUMMARY POLICY PRINCIPAL/INSURED POLICY PERIOD 0106195885 LB CITY OF SEBASTIAN POLICE 0 11/01/20 TOTAL BALANCE TRANSACTIONS SINCE LAST STATEMENT Total Transactions (See Transaction Detail Section) TOTAL BALANCE TRANSACTION DETAIL POLICY NUMBER 0106195885 LB LIABILITY 11/01/20 Renewal TOTAL TRANSACTIONS �3 v9l,e-v CONTINUED ON NEXT PAGE MIN. DUE $3,091.00 $3,091.00 BALANCE CO $3,091.00 12 $3,091.00 +3.091.00 $3,091.00 3,091.00 $3,091.00 Please detach the payment coupon and mail with your payment in the enclosed envelope to: TRAVELERS CL REMITTANCE CENTER, PO BOX 660317, DALLAS, TX 75266-0317. .............................................................................................................................. 648842H 2O20316 9774 247 ODFG24 Payment Coupon Make checks payable to: TRAVELERS LSJ INSURANCE AGENCY INC Include Account Number on the check. CITY OF SEBASTIAN POLICE OFFIC 986OK9214 Change of Address? TOTAL BALANCE TRAVELERS CL REMITTANCE CENTER PO BOX 660317 DALLAS, TX 75266-0317 '��I1.ihl,��l��llllll�ll��ll��ll��������1'II'•�'J�'1��'III��I�'� ❑ Place an "X" here. $3,091.00 Print changes on reverse side. MINIMUM DUE PAYMENT MUST BE RECEIVED BY $3,091.00 DECEMBER 01, 2020 AMOUNT ENCLOSED I 993938363011.3932313440393939393800030910000030910020 PL-9837 age 02 of 03 Customer Service Contacts Billing iuestions MONDAY-FRIDAY, 7:00 A.M. - 8:00 P.M. EST 800-252-2268 Your Account Number: 986OK9214 Automated Inquiry. 24 hrs a day, 7days a week 800-252-2268 Police Ouestions LSJ INSURANCE AGENCY INC 407-644-4423 Claim Questions BUSINESS INSURANCE 800-238-6225 CONSTRUCTION 800-828-4132 NATIONAL ACCOUNTS 800-832-7839 BOND & FINANCIAL PRODUCTS 800-842-8496 Code Insuring Company 12 TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA 1, 3 CLDBBIL1 13 ity of Sebastian Debbie Krueger 1225 Main Street Sebastian, FL 32958 0 Fee Advice for Period July 1, 2020 to Detail of Calculation: Annual Fee Flat Fee $5,000.00 $500 for 6 additional accounts $3,000.00 October 9, 2020 M70870 Sebastian Police September 30, 2020 Quarterly Fee $1,250.00 $750.00 $5.00 Security Transactions Current Period Year To Date 9/30/2020 705 705 12/31 /2020 705 3/31 /2021 705 6/30/2021 $0.00 (300 included in annual fee) Total Transaction Charges $2,025.00 Total Amount Due $4,025.00 These fees will automatically be charged to your account. If you have any questions, please contact Mindy Johnson at 813.288.4990 HOLLYWOOD TAMPA 1715 N. WESTSHORE BLVD., SUITE 750 TAMPA, FL 33607 TEL (877) 382-5268 FAX (813)301-1295 cl wuww.salemtrust. com FOSTER & FOSTER MEMORANDUM TO: All Foster & Foster, Inc. Clients FROM: Jonathan R. Davidson, Chief Legal Officer DATE: October 6, 2020 RE: Cyber Liability Insurance To Our Valued Clients: We hope this memorandum finds you well, particularly considering the challenging times we find ourselves in. As always, our primary goal at Foster & Foster, Inc. is to provide you with the highest quality service. To that end, and in response to a number of client inquiries, we write to inform you that we have, effective November 1, 2020, increased our cyber liability insurance coverage from $1 million to $2 million per claim. The cyber space continues to evolve. To date, the bulk our cyber-related expenditures have focused on safeguarding your data to reduce the likelihood that we ever experience a breach. We are confident the safeguards we have put in place are strong and please know that we will continue to evaluate our policies and procedures on a regular basis and will not hesitate to make improvements as necessary in this area. The increase in cyber liability coverage, outlined above, is purely for your benefit — to provide reimbursement in the event of a breach which causes you to suffer damages. Attached to this memorandum please find a certificate of insurance that we kindly ask you keep on file. If you have any questions or require any additional information please contact me directly at ionatlian.davidsonca)foster-foster.com or (239) 600-6460 x159. Thank you for your attention to this matter and we will be in touch soon. 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 • (239) 433-5500 • Fax (239) 481-0634 • www.foster-foster.com Kenneth Killgore From: Bonni Jensen <bonni@robertdklausner.com> Sent: Thursday, November 12, 2020 5:08 PM To: Manny Anon Cc: Paul Carlisle; bsjteam; Kenneth Killgore Subject: RE: Agenda Item - IRS Ordinance 2020-03 Attachments: IRS ORD revised (00161855xBC171).PDF CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Manny, Several of the other City attorney's have asked similar questions. I think that the City has the inherent power to give the board the power to keep the plan in compliance with the Internal Revenue Code provisions. Seethe Charter provision below: Sec. 2.07. - General pourers and duties. All powers of the city shall be vested in the city council, except as otherwise provided by law or this Charter, and the city council shall provide for the exercise thereof and for the performance of all duties and obligations imposed on the city by law. In the current pension plan, the Trustees are given the power to determine the investment provisions applicable to the pension plan, including adding provisions to the plan. Section 58-49 Finances and fund management provides at subsection (f)(2) as follows: (f) The board shall have the following investment powers and authority: (2) All monies paid into or held in the fund shall be invested and reinvested by the board and the investment of all or any part of such funds shall be subject to the following: a. Notwithstanding any limitation provided for in F.S. ch. 185, to the contrary (unless such limitation may not be amended by local ordinance) or any limitation in prior city ordinances to the contrary, all monies paid into or held in the fund may be invested and reinvested in such securities, investment vehicles or property wherever situated and of whatever kind, as shall be approved by the board, including but not limited to common or preferred stocks, bonds, and other evidences of indebtedness or ownership. In no event, however, shall more than 25 percent of the assets -of the fund at market value be invested in foreign securities. b. The board shall develop and adopt a written investment policy statement setting forth permissible types of investments, goals and objectives of investments and setting quality and quantity limitations on investments in accordance with the recommendations of its investment consultants. The investment policy statement shall be reviewed by the board at least annually. C. In addition, the board may, upon recommendation by the board's investment consultant, make investments in group trusts meeting the requirements of Internal Revenue ulr Service Revenue Ruling 81-100, Revenue Ruling 2011-1, IRS Notice 2012-6 and Revenue Ruling 2014-24 or successor rulings or guidance of similar import, and operated or maintained exclusively for the commingling and collective investment of monies, provided that the funds in the group trust consist exclusively of trust assets held under plans qualified under section 401(a) of the code, individual retirement accounts that are exempt under section 408(e) of the code, eligible governmental plans that meet the requirements of section 457(b) of the code, and governmental plans under 401(a)(24) of the code. For this purpose, a trust includes a custodial account or separate tax favored account maintained by an insurance company that is treated as a trust under section 401(f) or under section 457(g)(3) of the code. While any portion of the assets of the fund are invested in such a group trust, such group trust is itself adopted as a part of the system or plan. Any collective or common group trust to which assets of the fund are transferred pursuant to subsection c. shall be adopted by the board as part of the plan by executing appropriate participation, adoption agreements, and/or trust agreements with the group trust's trustee. The separate account maintained by the group trust for the plan pursuant to subsection c. shall not be used for, or diverted to, any purpose other than for the exclusive benefit of the members and beneficiaries of the plan. 3. For purposes of valuation, the value of the separate account maintained by the group trust for the plan shall be the fair market value of the portion of the group trust held for the plan, determined in accordance with generally recognized valuation procedures. That being said, I am happy to discuss other language that may be more expressive of the City's ultimate authority such as the below or any other similar language. 1. In recognition of the changing requirements of system qualification, the Board shall adopt an administrative policy setting forth the required provisions for tax qualification. Such a policy shall be amended by the Board as required to maintain continuing compliance with the Internal Revenue Code and that policy and any amendments shall be incorporated herein by reference. m 1 In recognition of the changing requirements of system qualification, the Board is hereby authorized to make and adopt such reasonable rules and regulations as may be necessary or convenient preserve the status of the retirement plan as a qualified pension plan under the provisions of the Internal Revenue Code of the United States, as amended, or under successor or related provisions of law. Let me know. You can call me at 561-373-6714 to discuss. To expedite the handling of your email, please be sure to copy Bonni S. Jensen Klausner, Kaufman, Jensen & Levinson 7080 N.W. 4th Street on your emails. H/ Plantation, Florida 33317 Telephone: 954-916-1202 Facsimile: 954-916-1232 bon nia-robertdklausner.com website —www.klausnerkaufman.com CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. From: Manon@cityofsebastian.org <Manon@cityofsebastian.org> Sent: Thursday, November 5, 202012:59 PM To: Bonni Jensen <bonni@robertdklausner.com>; Kenneth Killgore <kkillgore@CityofSebastian.org> Cc: pcarlisle@cityofsebastian.org; bsjteam <bsjteam@robertdkiausner.com> Subject: RE: Agenda Item - IRS Ordinance 2020-03 Mrs./Ms. Jensen: Ma'am my name is Manny Anon, Jr.. I'm working remotely. So please provide me the legal authority you are relying on so I can review it. If I have any question, I will reach out to you or advise the City accordingly. Thanks MANNY ANON, J t, ESQ CITY ATTO' NEY CITY OF SEBASTIAN 12251MAIN STREET SEBASTIAN, FL. 32956 772-366-6201 (OFFICE) 772-366-442-0 (FAX) 14/-3 Please (Vote: Florida has a very broad Public Records Law. Unless specifically exempt by state law, written communications to city officials or staff regarding official city business are public records available to the public and media upon request. If your email communication is related to official government business, it may therefore be subject to public disclosure. From: Bonni Jensen fmailto:bonni(arobertdkiausner.com] Sent: Thursday, November 5, 2020 12:56 PM To: Kenneth Killgore Cc: Manny Anon; Paul Carlisle; bsjteam Subject: Re: Agenda Item - IRS Ordinance 2020-03 CAUTION: This email originated from outside your organization. Exercise caution when opening attachments or clicking links, especially from unknown senders. Ken, I will. Do you have his phone number? Sent from my Whone Bonni Jensen On Nov 5, 2020, at 11:21 AM, Kenneth Killgore <kkillkore@citvofsebastian.orp,> wrote: Bonni, Can you address the City Attorney's question? Ken Killgore Administrative Services Director/CFO City of Sebastian From: Manny Anon Sent: Thursday, November 05, 2020 11:10 AM To: Kenneth Killgore; Paul Carlisle Subject: RE: Agenda Item - IRS Ordinance 2020-03 Ken: I reviewed all. Full disclosure, I'm not a Pension expert, but I can read. That being said, how can the City Council surrender its legislative powers and authorities to the Pension Board, i.e., allowing the Board to adopt an admin policy which has the "full force of law as if adopted by the City Council"? What is the legal authority? I cannot find it in the material you attached. Thanks From: Kenneth Killgore Sent: Monday, November 2, 2020 11:52 AM To: Manny Anon; Paul Carlisle Subject: Agenda Item - IRS Ordinance 2020-03 Manny and Paul, The Pension Board Attorney is recommending the attached draft Ordinance. I have drafted the Agenda item and provided a couple of pdf attachments. Please review and offer any thoughts or comments. I anticipate having this for the November 181" City Council meeting. Thanks, Ken Killgore Administrative Services Director/CFO City of Sebastian <IRS ORD 20-03.docx> <Agenda Item - IRS Ordinance 2020-03.doc> H/ LIIYLFLAAS�` Yr■■■I ■ HOME OF PELICAN ISLAND CITY COUNCIL AGENDA TRANSMITTAL FORM COUNCIL MEETING DATE: November 18, 2020 AGENDA ITEM TITLE: Adoption of Ordinance 0-20-03 to Adjust the Police Pension Plan for Changes to IRS Required Minimum Distribution Rules and Provide that the Police Pension Board Shall Adopt Necessary and Appropriate Amendments to Maintain the Police Pension Plan as a IRS Qualified Public Pension Plan. RECOMMENDATION: Approve Ordinance 0-20-03. BACKGROUND: This Ordinance addresses changes enacted by the SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019). It has been proposed by Bonni Jensen of the firm Klausner, Kaufman, Jensen & Levinson, who serves as the Police Pension Board Attorney. The previous law was that individuals had to begin taking required minimum distributions no later than April 1 of the calendar year following the later of the calendar year in which the member attains age 70'/2 or the calendar year in which the member terminated employment with the City. The SECURE Act changed this for those reaching 70'h after 2019 to a requirement that the first required minimum distribution must be taken by April 1 of the year after reaching age 72 or the calendar year in which the member terminated employment with the City. There are no likely instances these provisions would even apply to the Police Pension Plan but they are needed to keep the Plan's status as an IRS Qualified Public Pension Plan. Section 5 of the Ordinance provides that the Police Pension Board shall adopt and amend its administrative policy for the required provisions for tax qualification to maintain continuing compliance with the Internal Revenue Code and that those amendments shall have the force of law as if adopted by the City Council. This removes the necessity for City Council action to specifically approve every change that is required in any case to keep the Police Pension Plan in compliance with the law. IF AGENDA ITEM REQUIRES EXPENDITURE OF FUNDS: N/A Administrative Services Department/CFO Review: ATTACHMENTS: Ordinance 0-20-03 IRS Guide - Qualified Plan Requirements — Required Minimum Distributions IRS Bulletin on Changes to Required Minimum Distributions City Attorney Review: Procurement Division Review: N/A City Manager Authorization: Date: ORDINANCE NO. 2020-03 AN ORDINANCE OF THE CITY OF SEBASTIAN, FLORIDA, AMENDING CHAPTER 58, ARTICLE III, POLICE OFFICERS' RETIREMENT PLAN, OF THE CODE OF ORDINANCES; AMENDING SECTION 58-51, BENEFIT AMOUNTS AND ELIGIBILITY; SECTION 58-52, PRE -RETIREMENT DEATH; SECTION 58-55, OPTIONAL FORMS OF BENEFITS; SECTION 58-61, MINIMUM DISTRIBUTION OF BENEFITS; SECTION 58-62, MISCELLANEOUS PROVISIONS; PROVIDING FOR SEVERABILITY; PROVIDING FOR CODIFICATION; PROVIDING FOR THE REPEAL OF ALL ORDINANCES IN CONFLICT HEREWITH, TO THE EXTENT OF SUCH CONFLICT; PROVIDING FOR SCRIVENERS ERRORS; AND PROVIDING FOR AN EFFECTIVE DATE. NOW, THEREFORE BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF SEBASTIAN, FLORIDA: SECTION 1. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-51, Benefit amounts and eligibility, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-51.- Benefit amounts and eligibility. (e) Required distribution date. The member's benefit under this section must begin to be distributed to the member no later than April 1 of the calendar year following the later of the calendar year in which the member attains age 70-112 72. provided the member had not attained ane 70'/z by December 31. 2019; or the calendar year in which the member terminates employment with the city. SECTION 2. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-52, Pre -retirement death, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-52. - Pre -retirement death. (b) Deceased members vested or eligible for retirement with spouse as beneficiary. This subsection (b) applies only when the member's spouse is the sole designated beneficiary. The spouse beneficiary of any member who dies and who, at the date of his death, was vested or eligible for early or normal retirement shall be entitled to a benefit as follows: Page 1 of 4 (5) Notwithstanding anything contained in this section to the contrary, in any event, distributions to the spouse beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the member died, or by a date selected pursuant to the above provisions in this section that must be on or before December 31 of the calendar year in which the member would have attained aae 72. SECTION 3. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-55, Optional forms of benefits, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-55. - Optional forms of benefits. (e) Retirement income payments shall be made under the option elected in accordance with this section and shall be subject to the following limitations: (5) The member's benefit under this section must begin to be distributed to the member no later than April 1 of the calendar year following the later of the calendar year in which the member attains age 7-" 72, provided the member had not attained awe 70'/2 by December 31. 2019, or the calendar year in which the member terminates employment with the city. SECTION 4. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-61, Minimum distribution of benefits, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-61. - Minimum distribution of benefits. (b) Time and manner of distribution. (1) Required beginning date. The member's entire interest will be distributed, or begin to be distributed, to the member no later than the member's required beginning date which shall not be later than April 1 of the calendar year following the later of the calendar year in which the member attains age 7" 72. ❑rovided the member had not attained aqe 70Y2 by December 31. 2019.. or the calendar year in which the member terminates employment with the city. Page 2 of 4 H1? (2) Death of member before distributions begin. If the member dies before distributions begin, the member's entire interest will be distributed, or begin to be distributed no later than as follows: a. If the member's surviving spouse is the member's sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the member died, or by a date on or before December 31 of the calendar year in which the member would have attained age 79;4 72. provided the member had not turned 701/2 by December 31. 2019, if later, as the surviving spouse elects. SECTION 5. That Chapter 58, Article III, Police Officers' Retirement Plan, Section 58-62, Miscellaneous provisions, of the Code of Ordinances of the City of Sebastian, is hereby amended to read as follows: Sec. 58-62. - Miscellaneous provisions. (c) Qualification of system. It is intended that the system will constitute a qualified public pension plan under the applicable provisions of the code for a qualified plan under code section 401(a) and a governmental plan under code section 414(d), as now in effect or hereafter amended. Any modification or amendment of the system may be made retroactively, if necessary or appropriate, to qualify or maintain the system as a plan meeting the requirements of the applicable provisions of the code as now in effect or hereafter amended, or any other applicable provisions of the U.S. Federal Tax Laws, as now in effect or hereafter amended or adopted, and the regulations issued thereunder. (1) In recognition of the chanain❑ recuire_ments of system aualification,the Board shall adopt an administrative policy, setting forth the required provisions for tax oualification. Such a rolicv shall be amended by the Board as required to maintain continuing compliance with the Internal Revenue Code and that oolicv and anv amendments shall have the force of law as if adopted by the Citv Council. SECTION 6: Severability. If any portion, part or section of this ordinance is declared invalid, the valid remainder hereof shall remain in full force and effect. Page 3 of 4 SECTION 7: Codification. This Ordinance shall be codified in the Code of Ordinances of the City of Sebastian. SECTION 8: Repeal of Ordinances in Conflict. All ordinances or parts of ordinances in conflict herewith are hereby repealed to the extent of such conflict. SECTION 9: Scrivener's Errors. Sections of this Ordinance may be renumbered or re -lettered and corrections of typographical errors which do not affect the intent may be authorized by the City Manager, or the City Manager's designee, without need of public hearing, by filing a corrected or re -codified copy of same with the City Clerk. SECTION 10: Effective Date. This ordinance shall become effective immediately upon its adoption by the City Council. The foregoing Ordinance was moved for adoption by Councilmember The motion was seconded by Councilmember and, upon being put to a vote, the vote was as follows: Mayor Ed Dodd Vice -mayor Jim Hill Councilmember Bob McPartlan Councilmember Fred Jones Councilmember Christopher Nunn The Mayor thereupon declared this Ordinance duly passed and adopted on this 18th day of November, 2020. ATTEST: Jeanette Williams, City Clerk CITY OF SEBASTIAN, FLORIDA 0 Ed Dodd, Mayor Approved as to form and legality for Reliance by the City of Sebastian only: Manny Anon, Jr., City Attorney Page 4 of 4 A Guide to Common Qualified Plan Requirements I Internal Revenue Service Page 1 of 1 Did your plan make required minimum distributions in accordance with section 401(a)(9)? Check to make sure that all distributions were made to employees at the correct time and in the correct amounts as described under the plan document. An employee's assets may not remain in the retirement plan indefinitely. Section 401 (a)(9) sets out the latest date by which distributions must begin and the minimum amount of the distribution. A plan must provide that the interest of each employee will begin to be distributed to the employee not later than the required beginning date which means, in general, April 1 of the calendar year following the later of: a. the calendar year in which the employee attains age 72 (70 1/2 if you reach 701/2 before January 1, 2020), or b. the calendar year in which the employee retires. [This does not apply to an employee who is a 5-percent owner.] At a minimum, the distributions must be evenly spread over the life of the employee or over the lives of the employee and a designated beneficiary (or over a period not extending beyond the life expectancy of the employee and a designated beneficiary). https://www.irs.gov/retirement-plans/a-guide-to-common-qualified-plan-requirements 11/2/2020 Retirement Plans FAQs regarding Required Minimum Distributions I Internal Revenue 5... Page 1 of 7 Retirement Plan and IRA Required Minimum Distributions FAQs COVID-19 Relief for Retirement Plans and IRAs 0 Information on this page may be affected b coronavirus relief for Pg Y Y retirement plans and IRAs. The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) became law on December 20, 2019. The Secure Act made major changes to the RMD rules. If you reached the age of 701/2 in 2019 the prior rule applies, and you must take your first RMD by April 1, 2020. If you reach age 701/2 in 2020 or later you must take your first RMD by April 1 of the year after you reach 72. For defined contribution plan participants, or Individual Retirement Account (IRA) owners, who die after December 31, 2019, (with a delayed effective date for certain collectively bargained plans), the SECURE Act requires the entire balance of the participant's account be distributed within ten years. There is an exception for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person or a person not more than ten years younger than the employee or IRA account owner. The new 10-year rule applies regardless of whether the participant dies before, on, or after, the required beginning date, now age 72. Your required minimum distribution is the minimum amount you must withdraw from your account each year. You generally have to start taking withdrawals from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account when you reach age 72 (701/2 if you reach 701/2 before January 1, 2020). Roth IRAs do not require withdrawals until after the death of the owner. • You can withdraw more than the minimum required amount. https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum... 10/29/2020 Retirement Plans FAQs regarding Required Minimum Distributions I Internal Revenue S... Page 2 of 7 Your withdrawals will be included in your taxable income except for any part that was taxed before (your basis) or that can be received tax-free (such as qualified distributions from designated Roth accounts). For more information on IRAs, including required withdrawals, see: • Required Minimum Distributions (RMDs) • Individual Retirement Arrangements (IRAs) • Required Minimum Distribution Worksheets for IRAs • Chart of required minimum distributions for IRA beneficiaries • Publication 560, Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans) • Publication 590-8, Distributions from Individual Retirement Arrangements (IRAs) • RMD Comparison Chart (IRAsys. Defined Contribution Plans) These frequently asked questions and answers provide general information and should not be cited as legal authority. 1. What are Required Minimum Distributions? 2. What types of retirement plans require minimum distributions? 3. When must I receive my required minimum distribution from my IRA? 4. How is the amount of the required minimum distribution calculated? 5. Can an account owner just take a RMD from one account instead of separately from each account? 6. Who calculates the amount of the RMD? 7. Can an account owner withdraw more than the RMD? 8. What happens if a person does not take a RMD by the required deadline? 9. Can the penalty for not taking the full RMD be waived? 10. Cana distribution in excess of the RMD for one year be applied to the RMD for a future year? 11. How are RMDs taxed? 12. Can RMD amounts be rolled over into another tax -deferred account? 13. Is an employer required to make plan contributions for an employee who has turned 701/2 and is receiving required minimum distributions? 14. What are the required minimum distribution requirements for pre-1987 contributions to a 403(b) plan? What are Required Minimum Distributions? Required Minimum Distributions (RMDs) generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 72 (701/2 if you reach 701/2 before January 1, 2020), if later, the year in which he or she retires. However, if the retirement plan account is an IRA or the account owner is a 5% owner of the Y113 https://www. irs. gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum... 10/29/2020 Retirement Plans FAQs regarding Required Minimum Distributions I Internal Revenue S... Page 3 of 7 business sponsoring the retirement plan, the RMDs must begin once the account holder is age 72 (701h if you reach 70 1/2before January 1, 2020), regardless of whether he or she is retired. Retirement plan participants and IRA owners, including owners of SEP IRAs and SIMPLE IRAs, are responsible for taking the correct amount of RMDs on time every year from their accounts, and they face stiff penalties for failure to take RMDs. When a retirement plan account owner or IRA owner, who dies before January 1, 2020, dies before RMDs have begun, generally, the entire amount of the owner's benefit must be distributed to the beneficiary who is an individual either (1) within 5 years of the owner's death, or (2) over the life of the beneficiary starting no later than one year following the owner's death. For defined contribution plan participants, or Individual Retirement Account owners, who die after December 31, 2019, (with a delayed effective date for certain collectively bargained plans), the SECURE Act requires the entire balance of the participant's account be distributed within ten years. There is an exception for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person or a person not more than ten years younger than the employee or IRA account owner. The new 10-year rule applies regardless of whether the participant dies before, on, or after, the required beginning date, now age 72. See Publication 590-13, Distributions from Individual Retirement Arrangements (IRAs), for complete details on when beneficiaries must start receiving RMDs. Return to List of FAQs What types of retirement plans require minimum distributions? The RMD rules apply to all employer sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans. The RMD rules also apply to traditional IRAs and IRA -based plans such as SEPs, SARSEPs, and SIMPLE IRAs. The RMD rules also apply to Roth 401(k) accounts. However, the RMD rules do not apply to Roth IRAs while the owner is alive. Return to List of FAQs When must I receive my required minimum distribution from my IRA? You must take yourfirst required minimum distribution for the year in which you turn age 72 (701/2 if you reach 70 1/z before January 1, 2020). However, the first payment can be delayed until April 1 of 2020 if you turn 701/2 in 2019. If you reach 701/2 in 2020, you have to take your first RMD by April 1 of the year after you reach the age of 72. For all subsequent years, including the year in which you were paid the first RMD by April 1, you must take the RMD by December 31 of the year. Iq l l� https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum... 10/29/2020 Retirement Plans FAQs regarding Required Minimum Distributions I Internal Revenue S... Page 4 of 7 A different deadline may apply to RMDs from pre-1987 contributions to a 403(b) plan (see FAQ 5 below). Return to List of FAQs How is the amount of the required minimum distribution calculated? Generally, a RMD is calculated for each account by dividing the prior December 31 balance of that IRA or retirement plan account by a life expectancy factor that IRS publishes in Tables in Publication 590-13, Distributions from Individual Retirement Arrangements (IRAs). Choose the life expectancy table to use based on your situation. • Joint and Last Survivor Table - use this if the sole beneficiary of the account is your spouse and your spouse is more than 10 years younger than you • Uniform Lifetime Table - use this if your spouse is not your sole beneficiary or your spouse is not more than 10 years younger • Single Life Expectancy Table - use this if you are a beneficiary of an account (an inherited I RA) See the worksheets to calculate required minimum distributions and the FAQ below for different rules that may apply to 403(b) plans. Return to List of FAQs Can an account owner just take a RMD from one account instead of separately from each account? An IRA owner must calculate the RMD separately for each IRA that he or she owns, but can withdraw the total amount from one or more of the IRAs. Similarly, a 403(b) contract owner must calculate the RMD separately for each 403(b) contract that he or she owns, but can take the total amount from one or more of the 403(b) contracts. However, RMDs required from other types of retirement plans, such as 401(k) and 457(b) plans have to be taken separately from each of those plan accounts. Return to List of FAQs Who calculates the amount of the RMD? Although the IRA custodian or retirement plan administrator may calculate the RMD, the IRA or retirement plan account owner is ultimately responsible for calculating the amount of the RMD. Return to List of FAQs Can an account owner withdraw more than the RMD?/f S https://www.irs.gov/retirement-plans/retirement-plans-fags-regarding-required-minimum... 10/29/2020 Retirement Plans FAQs regarding Required Minimum Distributions I Internal Revenue 5... Page 5 of 7 Yes. Return to List of FAQs What happens if a person does not take a RMD by the required deadline? If an account owner fails to withdraw a RMD, fails to withdraw the full amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%. The account owner should file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax -Favored Accounts P°F , with his or her federal tax return for the year in which the full amount of the RMD was not taken. Return to List of FAQs Can the penalty for not taking the full RMD be waived? Yes, the penalty may be waived if the account owner establishes that the shortfall in distributions was due to reasonable error and that reasonable steps are being taken to remedy the shortfall. In order to qualify for this relief, you must file Form 5329 P°F and attach a letter of explanation. See the instructions to Form 5329 PDF Return to List of FAQs Can a distribution in excess of the RMD for one year be applied to the RMD for a future year? No. Return to List of FAQs How are RMDs taxed? The account owner is taxed at his or her income tax rate on the amount of the withdrawn RMD. However, to the extent the RMD is a return of basis or is a qualified distribution from a Roth IRA, it is tax free. Return to List of FAQs Can RMD amounts be rolled over into another tax -deferred account? No. Please refer to Publication 590-13, Distributions from Individual Retirement Arrangements (IRAs), for additional information. Return to List of FAQs https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum... 10/29/2020 Retirement Plans FAQs regarding Required Minimum Distributions I Internal Revenue 5... Page 6 of 7 Is an employer required to make plan contributions for an employee who has turned 72 (701/2if you reach 701/2before January 1, 2020) and is receiving required minimum distributions? Yes, you must continue contributions for an employee, even if they are receiving RMDs. You must also give the employee the option to continue making salary deferrals, if the plan permits them. Otherwise, you will fail to follow the plan's terms, causing your plan to lose its qualified status. You may correct this failure through the Employee Plans Compliance Resolution System (EPCRS). How contributions affect RMDs When you calculate an employee's RMD, consider any contributions that you make for that employee. For defined contribution plans, calculate the RMD for an employee by dividing his or her prior December 31 account balance by a life expectancy factor in the applicable table in Appendix B of Pub. 590-B. A defined benefit plan generally must make RMDs by distributing the participant's entire interest as calculated by the plan's formula in periodic annuity payments for: • the participant's life, • the joint lives of the participant and beneficiary, or • a "period certain" (see Treas. Reg. §1.401(a)(9)-6, A-3C�. See also: • RMD Comparison Chart (IRAsys. Defined Contribution Plans) • Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) Return to List of FAQs What are the required minimum distribution requirements for pre-1987 contributions to a 4O3(b) plan? If the 403(b) plan (including any 403(b) plan that received pre-1987 amounts in a direct transfer that complies with Treas. Reg. Section 1.403(b)-10(b)): • has separately accounted and kept records for pre-1987 amounts, and • is for the primary purpose of providing retirement benefits (see the incidental benefit rules in Treas. Reg. Section 1.401-1(b)(1)(1)), then the pre-1987 amounts (excluding any earnings or gains on such amounts): • are not subject to the age 72 (701/2 if you reach 701/2 before January 1, 2020) RMD rules of IRC Section 401(a)(9), • are not used in calculating age 701/2 (or 72) RMDs from the 403(b) plan, and https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum... 10/29/2020 Retirement Plans FAQs regarding Required Minimum Distributions I Internal Revenue S... Page 7 of 7 don't need to be distributed from the plan until December 31 of the year in which a participant turns age 75 or, if later, April 1 of the calendar year immediately following the calendar year in which the participant retires. If the plan includes both pre-1987 and post 1987 amounts, for distributions of any amounts in excess of the age 701/2 RMDs, the excess is considered to be from the pre-1987 amounts. If records are not kept for pre-1987 amounts, the entire account balance is subject to the age 701/2RMD rules of IRC section 401(a)(9). Return to List of FAQs Page Lost Reviewed or Updated. 19-Sep-2020 https://www. irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum... 10/29/2020 Daniel Acosta, Chief of Poi ice 1201 Main Street, Sebastian, FL 32958 Phone: 772-589-5233 1 Fax: 772-388-1872 E-mail: sod(EDdNofsebastian.ore DATE December 04, 2020 TO Kenneth Kilgore, Administrative Service Director / Retirement Board Administrator FROM Steven Marcinik, Police Department Patrol Sergeant REF : Retirement / Deferred Retirement Option Plan ******************************************************************************** Ken, as the Plan Administrator for the Police Officers' Retirement System, please accept this memo as my intentions to acknowledge and declare my eligibility for our retirement due to the attainment of qualifying age as well as my qualifying employment tenure in good standing with the City of Sebastian effective December 31, 2020. This Memo also serves as my written request and intent acknowledge my desire to enter the Deferred Retirement Option Plan / DROP and continue my employment effective January 01, 2021, for no more than 60 months (5 years). In addition, I also wish to change my ICMA deductions from 10% per pay period to $250 per pay period effective immediately. I am sure there are details which will require my attention and I am looking forward to sitting down with you to address these details soon. As a former board member who served with you, I want to acknowledge your impeccable and professional attention and service to our City and Plan. Thank you Ken, you are truly the best. SM JI CITY OF SEBASTIAN POLICE OFFICERS' PENSION PLAN CALENDAR OF BOARD ACTIVITIES — Updated December 2020 JANUARY: No Board activity. FEBRUARY: No Board activity. MARCH: 15` Quarter Board Meeting: • Update and Review Calendar of Activities. • Request update of Summary Plan Description (every two years). • Investment Report and Performance Review. • Receive Annual Report to Division of Retirement. APRIL: No Board activity. MAY: No Board activity. JUNE: 2nd Quarter Board Meeting: • Review Calendar of Board Activities. • Investment Report and Performance Review. • Select Board Chairperson and Secretary (every two years). • Approve and Distribute to Members the Summary Plan Description (if needed). JULY: Board Members should file Financial Disclosure forms by Julylst. AUGUST: Receive State premium tax monies. SEPTEMBER: • 3rd Quarter Board Meeting: • Establish Quarterly Meeting dates for following year. • Review Calendar of Board Activities • Approve Election Process for Police Officer Members (if needed). • Select Board appointed Member and request City Council confirmation (if needed). • Investment Report and Performance Review. Report on year-to-date expenses and approve budget for the next year OCTOBER: No Board activity. NOVEMBER: No Board activity. DECEMBER: • 4ch Quarter Board Meeting: • Review Calendar of Board Activities. • Consider changes to Operating Rules (if needed). • Report on Actual Operating Expenses for the year. • Investment Report and Performance Review. • Update Investment Policy and Allocation Strategy. • Accept the Actuarial Report. • Approve Expected Rate of Return. • Confirm renewal of Liability Insurance Policy. Page 1 of 1 Annual Operating Expenses Investment Managers: Highland Capital Boston Parners Fiera Capital (APEX) Renaissance Center Coast (Brookfield) Intercontinental Performance Manager - Graystone Salem Trust Company ADR Agent Fee - Foreign Dividends Sub -total Investment Expense Actuarial - Foster & Foster Experience Study Update - Foster & Foster State Report Preparation - Foster $ Foster Legal Services Administrative Fee to City Insurance Miscellaneous: Minutes Preparation Codification of Approved Ordinance(s) Functional Capacity Assessments Travel Contingency Sub -total Administrative Expense Total Operating Expenses C�— CITY OF SEBASTIAN, FLORIDA POLICE PENSION FUND - 2020/2021 BUDGET As of December 15, 2020 Amended Total Previous Year's Annual Totals 2020/2021 Actual/Estimated 2020/2021 Payments 2020/2021 2019/2020 2018/2019 2017/2018 2016/2017 2015/2016 2014/2015 2013/2014 Budget 10/1-12/31 1 1- 3 31 4/1-6/3 7 1- 9 30 Actual Est. Actual Actual Actual Actual Actual Actual Actual $ 55,000 $ 14,051.25 $ 14,051.25 $ 52,688.82 $ 34,621.51 $ 67,754.39 $ 60,479.85 $ 42,352.99 $ 54,402.32 $ 58,710.23 8,000 1,821.93 1,821.93 7,553.21 6,885.81 6,763.47 - - _ 6,500 1,908.87 1,908.87 6,056.53 5,943.76 5,386.84 7,000 1,701.10 1,701.10 6,489.11 6,874.16 6,451.11 3,000 434.27 434.27 2,427.00 3,113.51 2,909.69 13,500 - 13,500.00 13,500.00 13,500.00 13,500.00 13,500.00 16,875.00 15,000.00 26,000 4,025.00 4,025.00 24,655.00 25,480.00 28,250.00 7,245.00 6,265.00 6,615.00 5,295.00 1,500 - 1,140.85 1,643.74 581.24 451.80 141.44 186.69 $ 120,500 $ 23,942.42 $ $ $ $ 23,942.42 $ 113,369.67 $ 98,559.60 $ 132,659.24 $ 81,806.09 $ 62,569.79 $ 88,033.76 $ 79,192.92 18,000 - 17,464.00 16,756.00 17,834.00 13,331.00 14,765.00 21,398.00 15,544.00 - 7,500.00 - - - _ 3,000 - 3,000.00 3,000.00 - - _ 40,000 3,610.00 3,610.00 19,565.00 39,362.45 25,138.80 29,011.01 18,294.60 17,189.16 7,623.64 24,000 6,000.00 6,000.00 24,000.00 24,000.00 24,000.00 2,600 2,991.00 2,991.00 2,585.00 2,585.00 2,585.00 3,021.05 3,121.05 3,121.05 3,000.00 1,000 126.00 126.00 536.00 694.00 1,042.00 600 - - - 598.20 1,222.07 1,646.76 - 2,700.00 1,344.00 - 695.50 101.90 15,000 - - $ 104,200 $ 12,727.00 $ $ $ $ 12,727.00 $ 74,750.00 $ 89,097.45 $ 72,542.00 45,363.06 $ 36,876.15 $ 43,032.18 $ 27,814.40 $ 224,700 $ 36,669.42 $ $ $ _ $ 36,669.42 $ 188,119.67 $ 187,657.05 $ 205,201.24 127,169.15 $ 99,445.94 $ 131,065.94 $ 107,006.32 Graystone Consulting- A business of Morgan Stanley City of Sebastian Police Officers' Retirement Plan Quarterly Performance Summary As of September 30, 2020 Scott Owens, CFA@, CIMA@ David Wheeler, CIMA@, CFP@, CRPS@ Andy McIlvaine Senior Vice President - Wealth Management Senior Vice President - Wealth Management Institutional Consultant Institutional Consulting Director Institutional Consulting Director Financial Advisor - Wealth Management Scott.Owens@msgraystone.com Alterative Investment Director Andy.McIlvaine@msgraystone.com (813) 227-2027 Corporate Retirement Director (813) 227-2160 David.Wheeler@msgraystone.com (813)227-2178 Graystone Page 1 Consulting'" City of Sebastian Police Officers' Retirement Plan Capital Markets Returns as of September 30, 2020 Three Years Five Years Seven Years Quarter Year to Date 12 Months (annualized) (annualized) (annualized) S&P 500 Index 8.93 5.57 15.15 12.28 14.15 12.68 Dow Jones Industrial Average 8.22 (0.91) 5.70 9.98 14.02 11.74 Russell 3000 Index 9.21 5.41 15.00 11.65 13.69 12.11 Russell 3000 Value Index 5.42 (12.23) (5.67) 2.11 7.43 7.07 Russell 3000 Growth Index 12.86 23.00 36.12 20.73 19.51 16.80 Russell 1000 Index 9.47 6.40 16.01 12.38 14.09 12.54 Russell 1000 Value Index 5.59 (11.58) (5.02) 2.63 7.66 7.35 Russell 1000 Growth Index 13.22 24.33 37.53 21.67 20.10 17.39 Russell Midcap Index 7.46 (2.35) 4.55 7.13 10.13 9.37 Russell Midcap Value Index 6.40 (12.84) (7.30) 0.82 6.38 6.63 Russell Midcap Growth Index 9.37 13.92 23.23 16.23 15.53 13.25 Russell 2000 Index 4.93 (8.69) 0.39 1.77 8.00 6.43 Russell 2000 Value Index 2.56 (21.54) (14.88) (5.13) 4.11 3.27 Russell 2000 Growth Index 7.16 3.88 15.71 8.18 11.42 9.22 Consumer Discretionary 15.06 Materials 13.31 Industrials 12.47 Technology 11.95 Consumer Staples 10.38 Communication Services 8.94 Utilities 6.14 Health Care 5.87 Financials 4.44 Real Estate 1.92 Energy (19.72) Past Performance is not a guarantee of future results. Indices are not available for direct investment. Source: PARis Page 2 Graystone Consuhings" City of Sebastian Police Officers' Retirement Plan Capital Markets Returns as of September 30, 2020 ReLyional and Other Multi -Country Indices MSCI EAFE MSCI Europe MSCI Far East MSCI Pacific ex. Japan MSCI The World MSCI World ex. U.S. National Indices MSCI Hong Kong MSCI Ireland MSCI Japan MSCI Singapore ReLyional and Other Multi -Country Indices MSCI EM National Indices MSCI China MSCI Malaysia MSCI Taiwan MSCI Thailand U.S. Dollar Local Currency Quarter Year to 1 the 3 5 Quarter Year to 12 Months 3 Date Years Years Date Years 4.80 (7.09) 0.49 0.62 5.26 1.30 (9.08) (4.33) 1.05 5.34 4.51 (8.85) (0.79) (0.61) 4.24 0.35 (10.89) (6.85) 0.40 5.22 6.16 (2.24) 5.20 3.47 7.57 4.10 (4.64) 2.91 1.61 5.29 1.98 (11.26) (6.13) 0.27 6.73 (0.66) (12.18) (9.83) 2.07 6.41 8.05 2.12 10.99 8.33 11.10 6.81 1.42 9.12 N/A N/A 4.92 (7.13) 0.16 0.62 5.32 1.57 (8.63) (4.05) 1.28 5.46 1.56 (8.34) (1.64) (0.22) 6.59 1.55 (8.80) (2.68) (0.46) 6.60 14.65 2.20 21.12 3.06 4.58 9.81 (2.17) 12.61 6.04 4.95 7.08 (0.33) 7.31 4.32 7.90 4.74 (3.22) 4.78 2.10 5.19 (0.99) (22.11) (16.30) (3.66) 3.11 (3.12) (20.92) (17.38) (3.49) 2.29 .. . . I 1 I U.S. Dollar Local Currency Quarter Year to 12 Months 3 Quarter Year to 12 Months 3 Date Years Years Date Years 9.70 (0.91) 10.91 2.79 9.37 8.79 2.93 12.84 5.20 10.04 12.57 16.60 33.76 8.03 13.72 12.03 15.91 32.16 7.80 13.72 2.59 (5.83) (2.94) (2.20) 2.37 (0.51) (4.33) (3.67) (2.72) 1.22 17.10 15.27 36.03 14.89 17.79 14.95 11.37 26.99 13.14 14.81 (14.00) (29.42) (30.00) (7.02) 3.38 (14.00) (29.42) (30.00) (7.02) 3.38 Past Performance is not a guarantee of future results. Indices are not available for direct investment. Source: PARis Graystone Page 3 Consulting'" City of Sebastian Police Officers' Retirement Plan Capital Markets Returns as of September 30, 2020 Three Years Five Years Ten Years Quarter Year to Date 12 Months (annualized) (annualized) (annualized) U.S. Fixed Income 90-Day T-Bills 0.03 0.56 1.02 1.65 1.16 0.60 Barclays Aggregate 0.62 6.79 6.99 5.24 4.18 3.64 Barclays Credit 1.50 6.39 7.50 6.19 5.75 4.92 Barclays Govt/Credit 0.78 8.04 8.03 5.86 4.66 3.87 Barclays Government 0.18 8.81 7.97 5.47 3.73 3.10 Barclays High Yield 4.58 0.57 3.20 4.19 6.78 6.46 Barclays Intermediate Govt/Credit 0.62 5.93 6.32 4.43 3.40 2.91 Barclays Long Govt/Credit 1.22 14.20 12.92 10.21 8.78 7.36 Barclays Mortgage Backed 0.11 3.62 4.36 3.68 2.98 3.01 Barclays Municipal 1.23 3.33 4.09 4.28 3.84 3.99 Global Fixed Income Merrill Lynch Global High Yield 4.91 0.48 3.90 3.64 6.65 6.08 Barclays Global Treasury ex. US 4.63 5.94 5.99 3.36 3.84 1.70 Barclays Capital Majors ex. U.S. 4.01 5.12 4.57 3.41 3.68 1.10 Past Performance is not a guarantee of future results. Indices are not available for direct investment. Source: PARis Page 4 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Total Fund - Executive Summary as of September 30, 2020 Manager Performance Chart 16.0 12.0 v 8.0 4.0 0.0 Current Fiscal 1 3 5 7 Since Quarter YTD Year Years Years Years Inception Manager Annualized Performance Current Fiscal 1 3 5 7 Inception Quarter YTD Year Years Years Years 02/01/2011 Total Fund 5.96 7.04 7.04 5.88 7.81 7.05 6.92 Policy Index 1 4.68 6.80 6.80 6.75 8.37 7.62 7.92 Differences 1.28 0.24 0.24 -0.87 -0.56 -0.57 -1.00 Historic Asset Growth Current Fiscal 1 3 5 7 Inception Quarter YTD Year Years Years Years 02/01/2011 Total Fund Beginning Market Value 16,198 15,814 15,814 14,003 11,292 10,073 7,730 Net Contributions 37 366 366 839 1,107 1,386 2,296 Fees/Expenses -21 -98 -98 -306 -443 -566 -684 Income 79 354 354 1,080 1,700 2,180 2,750 Gain/Loss 885 741 741 1,562 3,521 4,105 5,086 Ending Market Value 17,178 17,178 17,178 17,178 17,178 17,178 17,178 Modern Portfolio Statistics Standard Maximum Return Deviation Beta Drawdown Total Fund 6.92 9.29 0.98 -17.43 Policy Index 1 7.92 9.27 1.00 -17.24 Manager Risk & Return 12.0 10.0 8.0 6.0 - 0 4.0 - 2.0 - 0.0 - -2.0 - -4.0 1 1 1 1 1 1 1 1 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Risk (Standard Deviation %) Total Fund O Policy Index 1 . 90-Day T-Bills Up Down Sharpe Inception Capture Alpha Capture Ratio R-Squared Date 97.35 106.49 -0.77 0.70 0.95 02/01/2011 100.00 100.00 0.00 0.80 1.00 02/01/2011 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 5 Consulting'" Page 6 City of Sebastian Police Officers' Retirement System as of September 30, 2020 N rr Trailing Returns Manager vs Benchmark: Return through September 2020 (not annualized if less than 1 year) 7 8 7 — — — — — — — — — — — — — — — 6 5- 1 quarter 1 year 3 years 5 years 10 years 17 Was 3 quarters Manager vs Benchmark: Return through September 2020 (not annualized if less than 1 year) ■ Sebastian Police (Gross) ■ Sebastian Police (Net) ■ Sebastian Police Policy Index Sebastian Police (Gross) 5.96% 7.04% 5.88% 7.81 % 7.41 % Sebastian Police (Net) 5.83% 6.40% 5.17% 7.15% 6.78% Sebastian Police Policy Index 4.68% 6.80% 6.75% 8.37% 8.25% Source: Zephyr 6.18% 5.51% The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" City of Sebastian Police Officers' Retirement System as of September 30, 2020 Risk/Return - 5 Year Analysis Manager Performance 20-Quarter Moving Windows, Computed Quarterly October 2015 - September 2020 150 / 130— —� —Sebastian Pdice (Gross) —Sebastian Pcl a Pdicy Index 120- 110 — 100 03 2015 042016 04 2017 04 2018 03 20z0 Manager Risk/Return Single Computation October 2015 - September 2020 10% 8% 6% E 4%- 2% 0°� 0 2°% 49% 61% 8% 10°% 12/. 14 Standard Deviation Return & Risk Measurements October 2015-September 2020: Summary Statistics • Sebastian Police (Gross) Market Benchmark: Sebastian Police Policy Index 0 Cash Equivalent: Citi group 3-month T-bill Sebastian Police (Gross) 7.81 % -0.55% 13.13% 0.97-17.43% 97.05% 101.79% -0.31 % 0.51 98.29% Sebastian Police Policy Index 8.37% 0.00% 13.37% 1.00-17.24% 100.00% 100.00% 0.00% 0.54 100.00% Source: Zephyr The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 7 Consulting'" City of Sebastian Police Officers' Retirement System as of September 30, 2020 Risk/Return - 17 3/4 Year Analysis Manager Performance 20-Quarter Moving Windows, Computed Quarterly January 2003 - September 2020 350 04 D02 Q4 2005 Q4 2007 Q4 2009 042011 042013 04 2015 Q4 2017 Q3 2 120 Sebastian Police (Gross) Manager Risk/Return Single Computation January 2003 - September 2020 %/ - 6% 5%- E 4%- —Sebastian Pdice (Gress) ba Sestian Pdice Policy Irdex _ 3% 2%- 1% 0i( 1% 2% Return & Risk Measurements January 2003-September 2020- Summary Statistics 4% 6% 8% Standard Deviation 10% • Sebastian Police (Gross) Nbrket Benchmark: Sebastian Police Policy Index Cash Equivalent: Citigmup 3-month T-bill 6.18% -0.69% 9.64% 1.00-22.97% 97.11 % 107.65% -0.64% 0.51 97.10% Sebastian Police Policy Index 6.87% 0.00% 9.50% 1.00-21.59% 100.00% 100.00% 0.00% 0.59 100.00% Source: Zephyr The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 8 Consulting'" City of Sebastian Police Officers' Retirement Plan Asset Allocation & Time Weighted Performance as of September 30, 2020 Allocation Performance(%) Market Quarter Fiscal 1 3 5 7 Since Inception Value % To YTD YTD Year Years Years Years Inception Date M Date Total Fund 17,177,800 100.00 5.96 0.91 7.04 7.04 5.88 7.81 7.05 6.92 02/01/2011 Policy Index 1 4.68 1.05 6.80 6.80 6.75 8.37 7.62 7.92 Domestic Equity Highland - Large Cap Value 3,667,077 21.35 4.71 -13.79 -6.86 -6.86 1.99 N/A Russell 1000 VL 5.59 -11.58 -5.02 -5.02 2.63 N/A Highland - Large Cap Growth 4,371,267 25.45 12.90 22.62 34.55 34.55 18.59 N/A Russell 1000 Gr 13.22 24.33 37.53 37.53 21.67 N/A Boston Partners - SMID Value 835,734 4.87 6.12 -19.97 -12.90 -12.90 -3.13 N/A Russell 2500 VL 3.54 -18.39 -12.62 -12.62 -2.69 N/A Fiera Capital - SMID Growth 1,018,061 5.93 14.38 18.13 32.01 32.01 15.96 N/A Russell 2500 GR 9.37 11.58 23.38 23.38 13.36 N/A International Equity Highland - Intl Value 721,590 4.20 6.69 -9.67 -0.17 -0.17 0.02 N/A MSCI EAFE Net 4.80 -7.09 0.49 0.49 0.62 N/A MSCI EAFE VL Net 1.19 -18.31 -11.93 -11.93 -5.86 N/A Renaissance - International Growth 1,040,562 6.06 7.45 -7.71 -0.27 -0.27 -2.86 N/A MSCI AC World ex US Net 6.25 -5.44 3.00 3.00 1.16 N/A Fixed Income Highland - Fixed Income 4,147,353 24.14 1.37 6.67 6.69 6.69 5.15 N/A Barclays Aggregate 0.62 6.79 6.99 6.99 5.24 N/A Alternative Investments Center Coast - MLP 345,523 2.01 -12.40 -43.58 -44.77 -44.77 -18.10 N/A Alerian MLP Index -16.26 -46.16 -48.35 -48.35 -20.75 N/A The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 9 N/A 2.80 08/01/2017 N/A 3.06 N/A 18.74 08/01/2017 N/A 21.59 N/A -2.22 08/01/2017 N/A -1.63 N/A 16.17 08/01/2017 N/A 14.13 N/A 0.37 08/01/2017 N/A 1.35 N/A -4.83 N/A -2.33 08/01/2017 N/A 1.86 N/A 5.01 08/01/2017 N/A 5.09 N/A -18.03 08/01/2017 N/A -20.86 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Asset Allocation & Time Weighted Performance as of September 30, 2020 Allocation Market Quarter Value % To YTD Fiscal YTD ($) Date Intercontinental - Private Real Estate 724,831 4.22 0.90 1.15 4.41 NCREIF Property Idx 0.74 0.45 2.01 Cash Receipt & Disbursement 305,801 1.78 0.00 0.28 0.50 90-Day T-Bills 0.03 0.56 1.02 Performance(%) 1 3 5 7 Since Inception Year Years Years Years Inception Date 4.41 8.26 N/A N/A 8.26 10/01/2017 2.01 5.11 N/A N/A 5.11 0.50 1.37 N/A 1.02 1.65 N/A The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 10 N/A 1.33 08/01/2017 N/A 1.62 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Asset Allocation & Net Dollar Weighted Performance (IRR) as of September 30, 2020 Total Fund 100.00 5.81 Domestic Equity Highland - Large Cap Value 21.35 4.43 Highland - Large Cap Growth 25.45 12.87 Boston Partners - SMID Value 4.87 5.10 Fiera Capital - SMID Growth 5.93 14.19 International Equity Highland - Intl Value 4.20 6.69 Renaissance - International Growth 6.06 7.29 Fixed Income Highland - Fixed Income 24.14 1.29 Alternative Investments Center Coast - MLP 2.01 -12.51 Intercontinental - Private Real Estate 4.22 0.65 Cash Receipt & Disbursement 1.78 -0.45 Fiscal 1 3 5 7 Since Inception YTD Year Years Years Years Inception Date 6.16 6.16 5.14 7.07 6.35 6.31 01/31/2011 -6.92 -6.92 2.13 N/A N/A 3.23 07/31/2017 33.53 33.53 17.63 N/A N/A 17.76 07/31/2017 -13.62 -13.62 -4.58 N/A N/A -3.68 07/31/2017 31.03 31.03 15.02 N/A N/A 15.28 07/31/2017 -0.54 -0.54 -0.50 N/A N/A -0.14 07/31/2017 -0.90 -0.90 -3.53 N/A N/A -3.02 07/31/2017 6.36 6.36 4.71 N/A N/A 4.58 07/31/2017 -45.07 -45.07 -18.44 N/A N/A -18.34 07/31/2017 3.03 3.03 6.76 N/A N/A 6.76 10/15/2017 -3.16 -3.16 -3.98 N/A N/A -3.84 07/31/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a Graystone guarantee of future results. sM Page 11 Consulting City of Sebastian Police Officers' Retirement Plan Asset Allocation Compliance as of September 30, 2020 Executive Summary Global Equity $11,654.3K (67.8%) — 40.0% - 70.0% Fixed Income $4,147.4K (24.1%) — 20.0% - 35.0% Alternatives $1,070.4K (6.2%) — 0.0% - 20.0% Receipt & Disbursement $305.8K (1.8%) — 0.V0 0.0% - 5.0% 0.0% i i i i i 0.0% 15.0% 30.0% 45.0% 60.0% 75.0% 90.0% ❑ Policy ■ Target . In Policy . Outside Policy The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 12 105.0% Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Asset Allocation Compliance as of September 30, 2020 Executive Summary Highland - Large Cap Value $3,667.1K (21.30/6) - 21.3 15.0% - 25.0% Highland - Large Cap Growth $4,371.3K (25.4%) - 21.3 15.0% - 25.0% Boston Partners - SMID Value $835.7K (4.9%) - 5.0% 2.5% - 7.5% Fiera Capital - SMID Growth $1,018.1K (5.9%) - 2.5% - 7.5% Highland - Intl Value $721.6K (4.2%) - . 5.0% 2.5% - 7.5% Renaissance - International Growth $1,040.6K (6.10/.) - • 7.5% 5.0% - 10.0% Highland - Fixed Income $4,147.4K (24.1%) - 25.0 20.0% - 35.0% Center Coast - LP $345.5K (2.0%) - 5.0% 0.0% - 10.0% Intercontinental - Private Real Estate $724.8K (4.2%) - • 5.0% 0.0% - 10.0% Receipt & Disbursement $305.8K (1.8%) - 0.0% 0.0% - 5.0% 0.0% 6.0% 12.0% 18.0% 24.0% 30.0% 36.0% ■ Policy ■ Target . In Policy . Outside Policy The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 13 42.0% 48.0% Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Value - Executive Summary as of September 30, 2020 Manager Performance Chart 12.0 6.0 0.0 -6.0 -12.0 Current Fiscal Quarter YTD Manager Annualized Performance Current Quarter Highland - Large Cap Value 4.71 Russell 1000 VL 5.59 Differences -0.88 Historic Asset Growth Current Quarter Highland - Large Cap Value Beginning Market Value 3,131 Net Contributions 385 Fees/Expenses -4 Income 20 Gain/Loss 135 Ending Market Value 3,667 Modern Portfolio Statistics Return Highland - Large Cap Value 2.80 Russell 1000 VL 3.06 1 3 Since Year Years Inception Manager Risk & Return 3.6 32 2.8 . 2.4 - a 2.0 - Fiscal 1 3 Inception YTD Year Years 08/01/2017 -6.86 -6.86 1.99 2.80 -5.02 -5.02 2.63 3.06 -1.84 -1.84 -0.64 -0.26 Fiscal 1 3 Inception YTD Year Years 08/01/2017 3,534 3,534 4,467 4,342 384 384 -1,010 -1,010 -17 -17 -59 -59 97 97 288 305 -330 -330 -18 89 3,667 3,667 3,667 3,667 Standard Maximum Beta Deviation Drawdown 17.71 1.00 -28.00 17.67 1.00 -26.73 1.6 - 1.2 0.8 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Risk (Standard Deviation %) Highland - Large Cap Value Q Russell 1000 VL . 90-Day T-Bills Up Down Alpha Sharpe R-Squared Inception Capture Capture Ratio Date 98.85 99.79 -0.23 0.16 0.99 08/01/2017 100.00 100.00 0.00 0.17 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 14 Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Growth - Executive Summary as of September 30, 2020 Manager Performance Chart 60.0 45.0 30.0 15.0 0.0-0 lit Current Fiscal 1 Quarter YTD Year Manager Annualized Performance Current Fiscal Quarter YTD Highland - Large Cap Growth 12.90 34.55 Russell 1000 Gr 13.22 37.53 Differences -0.32 -2.98 Historic Asset Growth Current Fiscal Quarter YTD Highland - Large Cap Growth Beginning Market Value 4,177 3,521 Net Contributions -311 -313 Fees/Expenses -5 -18 Income 8 38 Gain/Loss 502 1,145 Ending Market Value 4,371 4,371 Modern Portfolio Statistics I" 3 Since Years Inception 1 3 Inception Year Years 08/01/2017 34.55 18.59 18.74 37.53 21.67 21.61 -2.98 -3.08 -2.87 1 3 Inception Year Years 08/01/2017 3,521 1,573 1,523 -313 1,128 1,128 -18 -43 -43 38 110 114 1,145 1,603 1,650 4,371 4,371 4,371 Manager Risk & Return 30.0 25.0 20.0 15.0 10.0 - 5.0 - 0.0 - -5.0 - -10.0 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Risk (Standard Deviation %) Highland - Large Cap Growth O Russell 1000 Gr . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Highland - Large Cap Growth 18.74 18.58 1.01 -17.36 96.28 105.94 -2.59 0.94 0.99 08/01/2017 Russell 1000 Gr 21.61 18.28 1.00 -15.98 100.00 100.00 0.00 1.08 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 15 City of Sebastian Police Officers' Retirement Plan Boston Partners - SMID Value - Executive Summary as of September 30, 2020 Manager Performance Chart 20.0 10.0 a 0.0 � -10.0 -20.0 Current Fiscal Quarter YTD Manager Annualized Performance Current Quarter Boston Partners - SMID Value 6.12 Russell 2500 VL 3.54 Differences 2.58 Historic Asset Growth Boston Partners - SMID Value Beginning Market Value Net Contributions Fees/Expenses Income Gain/Loss Ending Market Value Modern Portfolio Statistics 1 3 Since Year Years Inception Fiscal 1 3 Inception YTD Year Years 08/01/2017 -12.90 -12.90 -3.13 -2.22 -12.62 -12.62 -2.69 -1.63 -0.28 -0.28 -0.44 -0.59 Current Fiscal 1 3 Inception Quarter YTD Year Years 08/01/2017 668 855 855 689 672 130 96 96 245 245 -2 -8 -8 -23 -23 3 15 15 41 43 36 -123 -123 -117 -101 836 836 836 836 836 Manager Risk & Return 3.6 2." 1.8 - 0.9 - 0.0 - Y -1.8 - -2.7 - -3.6 - -4.5 1 1 1 1 1 1 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Risk (Standard Deviation %) Boston Partners - SMID Value O Russell 2500 VL . 90-Day T-Bills 1 1 25.0 30.0 35.0 Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Boston Partners - SMID Value -2.22 25.00 1.11 -38.80 110.37 110.28 0.02 -0.02 0.98 08/01/2017 Russell 2500 VL -1.63 22.30 1.00 -34.64 100.00 100.00 0.00 -0.03 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 16 City of Sebastian Police Officers' Retirement Plan Fiera Capital SMID Growth - Executive Summary as of September 30, 2020 Manager Performance Chart 45.0 30.0 v a 15.0 0.0 Current Fiscal Quarter YTD Manager Annualized Performance Current Quarter Fiera Capital - SMID Growth 14.38 Russell 2500 GR 9.37 Differences 5.01 Historic Asset Growth Current Quarter Fiera Capital - SMID Growth Beginning Market Value 892 Net Contributions - Fees/Expenses -2 Income 1 Gain/Loss 127 Ending Market Value 1,018 Modern Portfolio Statistics 1 Year a"_ 3 Since Years Inception Fiscal 1 3 Inception YTD Year Years 08/01/2017 32.01 32.01 15.96 16.17 23.38 23.38 13.36 14.15 8.63 8.63 2.60 2.02 Fiscal 1 3 Inception YTD Year Years 08/01/2017 799 799 690 669 -23 -23 -28 -28 -6 -6 -17 -17 5 5 14 15 243 243 359 379 1,018 1,018 1,018 1,018 Manager Risk & Return 24.0 20.0 16.0 12.0 8.0 - 4.0 - 0.0 - -4.0 - -8.0 1 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 32.0 Risk (Standard Deviation %) Fiera Capital - SMID Growth O Russell 2500 GR . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Fiera Capital - SMID Growth 16.17 21.49 0.96 -22.46 98.49 89.30 2.26 0.73 0.96 08/01/2017 Russell 2500 GR 14.15 21.86 1.00 -23.30 100.00 100.00 0.00 0.65 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 17 City of Sebastian Police Officers' Retirement Plan Highland - International Value - Executive Summary as of September 30, 2020 Manager Performance Chart 12.0 8.0 4.0 a 0.0 -4.0 Current Fiscal 1 Quarter YTD Year Manager Annualized Performance Current Fiscal Quarter YTD Highland - Intl Value 6.69 -0.17 MSCI EAFE Net 4.80 0.49 Differences 1.89 -0.66 Historic Asset Growth Current Fiscal Quarter YTD Highland - Intl Value Beginning Market Value 677 726 Net Contributions - -1 Fees/Expenses - -3 Income 3 15 Gain/Loss 43 -16 Ending Market Value 722 722 Modern Portfolio Statistics 3 Since Years Inception 1 3 Inception Year Years 08/01/2017 -0.17 0.02 0.37 0.49 0.62 1.35 -0.66 -0.60 -0.98 1 3 Inception Year Years 08/01/2017 726 709 701 -1 24 24 -3 -10 -10 15 50 52 -16 -51 -45 722 722 722 Manager Risk & Return 2.1 1.8 1.5 1.2 - 0 0.9 - 0.6 - 0.3 - 0.0 W -0.3 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Risk (Standard Deviation %) Highland - Intl Value O MSCI EAFE Net . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Highland - Intl Value 0.37 18.13 1.18 -28.37 115.76 120.00 -0.86 0.03 0.94 08/01/2017 MSCI EAFE Net 1.35 14.90 1.00 -22.83 100.00 100.00 0.00 0.06 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 18 Consulting'" City of Sebastian Police Officers' Retirement Plan Renaissance - International Growth - Executive Summary as of September 30, 2020 Manager Performance Chart Manager Risk & Return 15.0 3.6 10.0 2. 5.0 0.0 1.8 - 0.9 - -5.0 -10.0 0.0 - Current Fiscal 1 3 Since Quarter YTD Year Years Inception -0.9 - Manager Annualized Performance -1.a - Current Fiscal 1 3 Inception Quarter YTD Year Years 08/01/2017 -2.7 - Renaissance - International Growth 7.45 -0.27 -0.27 -2.86 -2.33 MSCI AC World ex US Net 6.25 3.00 3.00 1.16 1.86 -3.6 - Differences 1.20 -3.27 -3.27 -4.02 -4.19 Historic Asset Growth -4.5 1 1 Current Fiscal 1 3 Inception -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Quarter YTD Year Years 08/01/2017 Risk (Standard Deviation %) Renaissance - International Growth ■ Renaissance - International Growth O MSCI AC World ex US Net Beginning Market Value 970 1,051 1,051 1,029 1,016 Net Contributions - -1 -1 127 127 . 90-Day T-Bills Fees/Expenses -2 -6 -6 -20 -20 Income 7 19 19 70 72 Gain/Loss 65 -22 -22 -165 -154 Ending Market Value 1,041 1,041 1,041 1,041 1,041 Modern Portfolio Statistics Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Renaissance - International Growth -2.33 18.66 1.17 -33.88 99.07 117.28 -4.08 -0.11 0.95 08/01/2017 MSCI AC World ex US Net 1.86 15.61 1.00 -24.30 100.00 100.00 0.00 0.10 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 19 City of Sebastian Police Officers' Retirement Plan Highland - Fixed Income - Executive Summary as of September 30, 2020 Manager Performance Chart 12.0 9.0 v 6.0 3.0 0.0 Current Fiscal 1 3 Since Quarter YTD Year Years Inception Manager Annualized Performance Current Fiscal 1 3 Inception Quarter YTD Year Years 08/01/2017 Highland - Fixed Income 1.37 6.69 6.69 5.15 5.01 Barclays Aggregate 0.62 6.99 6.99 5.24 5.10 Differences 0.75 -0.30 -0.30 -0.09 -0.09 Historic Asset Growth Current Quarter Highland - Fixed Income Beginning Market Value 4,095 Net Contributions - Fees/Expenses -3 Income 27 Gain/Loss 29 Ending Market Value 4,147 Modern Portfolio Statistics Fiscal 1 3 Inception YTD Year Years 08/01/2017 3,900 3,900 3,885 3,980 -1 -1 -277 -389 -12 -12 -43 -43 124 124 364 390 137 137 218 209 4,147 4,147 4,147 4,147 Manager Risk & Return 6.4 5.6 4.8 4.0 - 3.2 - 2.4 - 1.6 - 0.8 - o.o -2.4 -1.6 -0.8 0.0 0.8 1.6 2.4 3.2 4.0 Risk (Standard Deviation %) Highland - Fixed Income O Barclays Aggregate . 90-Day T-Bills LW I 1 1 4.8 5.6 6.4 7.2 Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Highland - Fixed Income 5.01 5.02 0.97 -4.16 97.11 91.13 0.16 0.68 0.40 08/01/2017 Barclays Aggregate 5.10 3.28 1.00 -2.46 100.00 100.00 0.00 1.06 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 20 City of Sebastian Police Officers' Retirement Plan Center Coast - MLP - Executive Summary as of September 30, 2020 Manager Performance Chart 0.0 -20.0 y -40.0 v a -60.0 -80.0 Current Fiscal 1 Quarter YTD Year Manager Annualized Performance Current Fiscal Quarter YTD Center Coast - MLP -12.40 -44.77 Alerian MLP Index -16.26 -48.35 Differences 3.86 3.58 Historic Asset Growth Current Fiscal Quarter YTD Center Coast - MLP Beginning Market Value 396 637 Net Contributions -1 -6 Fees/Expenses - -2 Income 9 39 Gain/Loss -58 -323 Ending Market Value 346 346 Modern Portfolio Statistics 3 Since Years Inception 1 3 Inception Year Years 08/01/2017 -44.77 -18.10 -18.03 -48.35 -20.75 -20.88 3.58 2.65 2.85 1 3 Inception Year Years 08/01/2017 637 651 672 -6 -10 -10 -2 -8 -8 39 129 140 -323 -416 -448 346 346 346 Manager Risk & Return 15.0 10.0 5.0 0.0 - o -5.0 - -10.0 - -15.0 - -20.0 - -25.0 - -30.0 1 1 1 1 1 1 1 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 Risk (Standard Deviation %) Center Coast - MLP O Alerian MLP Index . 90-Day T-Bills 60.0 Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Center Coast - MLP -18.03 39.25 0.88 -57.87 94.51 92.17 0.38 -0.32 0.97 08/01/2017 Alerian MLP Index -20.88 43.93 1.00 -62.86 100.00 100.00 0.00 -0.33 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 21 Consulting'" City of Sebastian Police Officers' Retirement Plan Intercontinental - Private Real Estate - Executive Summary as of September 30, 2020 Manager Performance Chart 16.0 12.0 v 8.0 4.0 0.0 Current Fiscal 1 3 Since Quarter YTD Year Years Inception Manager Annualized Performance Current Fiscal 1 3 Inception Quarter YTD Year Years 10/01/2017 Intercontinental - Private Real Estate 0.90 4.41 4.41 8.26 8.26 NCREIF Property Idx 0.74 2.01 2.01 5.11 5.11 Differences 0.16 2.40 2.40 3.15 3.15 Historic Asset Growth Current Fiscal 1 3 Inception Quarter YTD Year Years 10/01/2017 Intercontinental - Private Real Estate Beginning Market Value 724 718 718 112 112 Net Contributions -3 -15 -15 490 490 Fees/Expenses -2 -10 -10 -26 -26 Income - - - - - Gain/Loss 6 31 31 149 149 Ending Market Value 725 725 725 725 725 Modern Portfolio Statistics Manager Risk & Return 12.0 10.5 9.0 - 7.5 - '.�. 6.0 - 4.5 - 3.0 - 1.5 - 0.0 - -1.5 1 1 1 1 1 1 1 1 1 1 -1.2 -0.6 0.0 0.6 1.2 1.8 2.4 3.0 3.6 4.2 4.8 5.4 Risk (Standard Deviation %) Intercontinental - Private Real Estate O NCREIF Property Idx . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Intercontinental - Private Real Estate 8.26 3.79 1.14 -0.02 150.07 2.02 2.35 1.70 0.59 10/01/2017 NCREIF Property Idx 5.11 2.56 1.00 -0.99 100.00 100.00 0.00 1.35 1.00 10/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 22 Page 23 City of Sebastian Police Officers' Retirement System IPS Checklist as of September 30, 2020 Equity Portfolio Listed on recognized exchange Yes Single issue not to exceed 10% at market value for No* each equity in each separately managed portfolio *Highland Large Cap Growth held 11.05% in Apple Fixed Income U.S. Government / Agency or U.S. Corporations Yes Bonds rated 'BBB" or better Yes Single corporate issuer not exceed 10% of bond portfolio Yes (except U.S. Government/Agency) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Important Notes About This Report PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. ACTUAL INDIVIDUAL ACCOUNT RESULTS WILL DIFFER FROM THE PERFORMANCE SHOWN IN THIS REPORT. INVESTMENT DECISIONS: Do not use this report as the sole basis for investment decisions_ Do not select an allocatiGn, investment disciplines or investment managers/funds based on performance alone_ Consider, in addition to performance results, other relevant information about each investment manager or fund, as well as matters such as }your investment objectives, risk tolerance and investment time horizon_ SOURCE OF PERFORMANCE INFORMATION FOR INVESTMENT MANAGERS AVAILA13LE IN CONSULTING AND EVALUATION SERVICES OR SELECT UMA: Each investment manager included in this report that participates in one or more of the Consulting and Evaluation Services or Select UMA programs ("Programs") has a track record of investing assets in the relevant investment discipline_ The investment manager's gross performance track record shown in this report consists of its gross performance in either the Morgan Stanley or the Smith Barney form of the Select UMA program (if that investment manager was in the Select UMA program ) for periods for which sufficient data is available_ If the strategy or similar strategies are available in both the Morgan Stanley and Smith 6arney forms of the program, this profile presents the composite for the strategy that is closest to the strategy c u rrently offered in the Select UMA program_ If both strategies are equally close, the profile shows the longer of the two composites_ For other periods, the gross performancetrack record is provided by the investment manager and consists of accounts managed by the investment manager in the same or a similar investment discipline, whether at PdGrgan Stanley or elsewhere (and may include institutional accounts, retail accounts and/or pooled investment vehicles such as mutual funds)_ Page 24 Graystone Consulting'" Page 25 Important Notes About This Report (Cont'd) There may be differences between the performance in the different forms of the Select UNIA program, in different Programs, and between the performance in Programs and performance outside the Programs, due to among other things, investment and operational differences For example: • Institutional accounts included in related performance may hold more securities than the Program accounts, participate in initial public offerings (IPOs) and invest directly in foreign securities (rather than in ADRs)- • Mutual funds included in related performance may hold more securitiesthan the Program accounts, may participate in IPOs- may engage in options and futures transactions, and are subject to certain regulatory limitations. • Performance results in Select UMA accounts could differ from that in Consulting and Evaluation Services accounts because Select UMA accounts may hold fewer securities, and have automatic rebalancing }gash sale loss and tax harvesting features - You should read the investment manager profile accompanying this report foreach investment manager- The investment manager profile gives further details on the sources of performance information for a particular investment manager, as well as other calculations of the manager's performance returns (such as performance net of fees and eKpenses)- SOURCE OF PERFORMANCE INFORMATION FOR GLOBAL INVESTMENT SOLUTION STRATEGIES: In the Global Investment Solutions program, dedicated portfolio managers employed by Morgan Stanley orthird party subadvisors make day-to-day investment decisions for clients' accounts invested in various investment strategies- Thetrack record shown in this reportfor Global Investment Solutions strategies consists of the portfolio management team's gross performance in that strategy in the Global Investment Solutions program (or a predecessor program) - SOURCE OF PERFORMANCE INFORMATION FOR OTHER INVESTMENT PJANAGER : For any investment managers shown in this report that are not available in the Consulting and Evaluation Services or Select UPJA programs, the performance data is obtained from databases maintained by parties outside Morgan Stanley. This data has been included for your information, and has not been verified by Morgan Stanley in any way- See "Sources of Information" below- The gross performance shown in this report for these managers could differ materially from their gross performance in investment advisory programs offered by firms other than Morgan Stanley- If you have invested with any such manager through anotherfirm, we recommend that you seek information from that firm on the manager's gross and net performance in its programs- Graystone Consulting'" Page 26 Important Notes About This Report (Cont'd) SOURCE OF PERFORMANCE INFOP IATIO N FOR FUNDS_ For any fund sho7,xin in this report the performance data is obtained from databases maintained by parties outside Morgan Stanley_ This data has been included foryour information, and has not been verified by Morgan Stanley in any way. See "Sources of Information': beloix BENCHMARK{ INDICES: Depending on the composition of your account and your investment objectives, the indices shown in this report may not be appropriate measures for comparison purposes and are therefore presented for illustration only. The indices used in this report may not be the same indices used for comparative purposes in the profile for each investment manager, mutual fund andlor ETF that accompanies this report_ Indices are unmanaged_ They do not reflect any management, custody, transaction or other expenses, and generally assume reinvestment of dividends, accrued income and capital gains_ Performance of selected indices may be more or less volatile than that of any investment manager/fund shoixn in this report Past performance of indices does not guaranteefuture results_ You cannot invest directly in an index_ MANAGERS AND FUNDS APPROVED IN MORGAN STANLEY WEALTH MANAGEMENT PROGRAMS: Morgan StanleyWealth Management approves certain managers and funds offered in its investment advisory programs: Morgan Stanley Wealth Management's Global Investment Manager Analysis ("GIMA") team approves managers and funds offered in Consulting and Evaluation Services and Select UMA_ . Managers and funds offered in Institutional Consulting Group and Graystone Consulting programs may be approved by GINIA approved by Morgan Stanley Wealth Management using another process, or not approved by Morgan Stanley'0lealth Management_ • Morgan Stanley Wealth Management does not approve managers in the Investment Management Services consulting program_ • Managers in the Global Investment Solutions (GIS) program are not evaluated by LIMA. Graystone Consulting'" Page 27 Important Notes About This Report (Cont'd) If you invest in a manager or fund that is not approved by Morgan Stanley Wealth Management, you are responsible for selecting and. or retaining that manager orfund. and Morgan Stanley Wealth Management does not recommend or monitor that manager or fund For more information on the approval process in any program, seethe applicable ADV brochure, available at }rr}rr}rx I'd organ StanIey.comfADV or from your Financial advisor or Private 1 ealth Advisor. If you have any questions about },%fhether or hoix Morgan Stanley Wealth Management has approved a manager or fund shown in this report. please ask our Financial Advisor or Private Wealth Advisor_ SHARE CLASSES OF FUNDS SHOWN IN THIS REPORT: The shareclass of a fund sholxn in this report may differ from the share class available in any Morgan Stanley Wealth Management investment advisory program in 1xhich you invest_ The performance of the share class in which you invest may differ from that of the share class sho7,vn in this report_ REINVESTMENT: The performance results shown in this report assume that all dividends, accrued income and capital gains were reinvested_ SOURCES OF INFORMATION: Although the statements of fact in this report have been obtained from_ and are based on, sources that Morgan Stanley believes to be reliable, Morgan Stanley makes no representation asto the accuracy or completeness of the information from sources outside Morgan Stanley_ Any such information may be incomplete and you should not use it as the sole basis for investment decisions - It is important to consider a fund's investment objectives. risks, charges and expenses carefully before investing. The prospectus contains this and other information about the fund. A copy of the prospectus may be obtained from your Financial Advisor or Private Wealth Advisor. Please read the prospectus carefully before investing In the fund. Graystone Consulting'" Performance Appendix Performance Data below is net of fees. Please seethe Morgan Stanley Smith Barney LLC Form ADV Part 2 Brochure for advisory accounts and/or any applicable brokerage account trade confirmation statements for a full disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. or 3 5 10 Since Inception Account Name QTD YTDJ= Years Years Years Inception 1 Date Boston Partners - SMID Value 5.92 -20.64 -13.83 -4.18 -- -- -3.22 08/01/2017 Center Coast - MLP -12.52 -43.82 -45.08 -18.52 -- -- -18.43 08/01/2017 Fiera Capital - SMID Growth 14.19 17.50 31.07 15.13 -- -- 15.39 08/01/2017 Highland - Fixed Income 1.29 6.43 6.38 4.75 -- -- 4.63 08/01/2017 Highland - Intl Value 6.69 -9.89 -0.54 -0.45 -- -- -0.08 08/01/2017 Highland - Large Cap Growth 12.77 22.18 33.90 18.06 -- -- 18.24 08/01/2017 Highland - Large Cap Value 4.60 -14.09 -7.31 1.41 -- -- 2.25 08/01/2017 Intercontinental - Private Real Estate 0.65 0.41 3.03 6.85 -- -- 6.85 10/01/2017 Receipt & Disbursement -0.52 -2.21 -5.94 -4.83 -- -- -4.55 08/01/2017 Renaissance - International Growth 7.29 -8.14 -0.90 -3.47 -- -- -2.91 08/01/2017 All performance above are Time Weighted(TWR) performance Glossary of Terms Active Contribution Return: The gain or loss percentage of an investment relative to the performance of the investment benchmark. Active Exposure: The percentage difference in weight of the portfolio compared to its policy benchmark. Active Return: Arithmetic difference between the manager's return and the benchmark's return over a specified time period. Actual Correlation: A measure of the correlation (linear dependence) between two variables X and Y, with a value between +1 and A inclusive. This is also referred to as coefficient of correlation. Alpha: A measure of a portfolio's time weighted return in excess of the market's return, both adjusted for risk. A positive alpha indicates that the portfolio outperformed the market on a risk -adjusted basis, and a negative alpha indicates the portfolio did worse than the market. Best Quarter: The highest quarterly return for a certain time period. Beta: A measure of the sensitivity of a portfolio's time weighted return (net of fees) against that of the market. A beta greater than 1.00 indicates volatility greater than the market. Consistency: The percentage of quarters that a product achieved a rate of return higher than that of its benchmark. The higher the consistency figure, the more value a manager has contributed to the product's performance. Core: Refers to an investment strategy mandate that is blend of growth and value styles without a pronounced tilt toward either style. Cumulative Selection Return (Cumulative Return): Cumulative investment performance over a specified period of time. Distribution Rate: The most recent distribution paid, annualized, and then divided by the current market price. Distribution rate may consist of investment income, short-term capital gains, long-term capital gains, and/or return of capital. Down Market Capture: The ratio of average portfolio returns over the benchmark during periods of negative benchmark return. Lower values indicate better product performance. Downside Risk: A measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. The higher the value, the more risk the product has. Downside Semi Deviation: A statistical calculation that measures the volatility of returns below a minimum acceptable return. This return measure isolates the negative portion of volatility: the larger the number, the greater the volatility. Drawdown: A drawdown is the peak -to -trough decline during a specific period of an investment, fund or commodity. Excess over Benchmark: The percentage gain or loss of an investment relative to the investment's benchmark. Excess Return: Arithmetic difference between the manager's return and the risk -free return over a specified time period. Growth: A diversified investment strategy which includes investment selections that have capital appreciation as the primary goal, with little or no dividend payouts. These strategies can include reinvestment in expansion, acquisitions, and/or research and development opportunities. Growth of Dollar: The aggregate amount an investment has gained or lost over a certain time period, also referred to as Cumulative Return, stated in terms of the amount to which an initial dollar investment would have grown over the given time period. Investment Decision Process (IDP): A model for structuring the investment process and implementing the correct attribution methodologies. The IDP includes every decision made concerning the division of the assets under management over the various asset categories. To analyze each decisions contribution to the total return, a modeling approach must measure the marginal value of every individual decision. In this respect, the hierarchy of the decisions becomes very important. We therefore use the IDP model, which serves as a proper foundation for registering the decisions and relating them to each other. Information Ratio: Measured by dividing the active rate of return by the tracking error. The higher the Information Ratio, the more value-added contribution by the manager. Jensen's Alpha: The Jensen's alpha measure is a risk -adjusted performance measure that represents the average return on a portfolio or investment above or below that predicted by the capital asset pricing model (CAPM) given the portfolio's or investment's beta and the average market return. This metric is also commonly referred to as alpha.. Kurtosis: A statistical measure that is used to describe the distribution, or skewness, of observed data around the mean, sometimes referred to as the volatility of volatility. Maximum Drawdown: The drawdown is defined as the percent retrenchment from a fund's peak to the fund's trough value. It is in effect from the time the fund's retrenchment begins until a new fund high is reached. The maximum drawdown encompasses both the period from the fund's peak to the fund's valley (length), and the time from the fund's valley to a new fund high (recovery). It measures the largest percentage drawdown that has occurred in any fund's data record. Modern Portfolio Theory (MPT): An investment analysis theory on how risk -averse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk is an inherent part of higher reward. Mutual Fund (MF): An investment program funded by shareholders that trade in diversified holdings and is professionally managed. Peer Group: A combination of funds that share the same investment style combined as a group for comparison purposes. Peer/ Plan Sponsor Universe: A combination of asset pools of total plan investments by specific sponsor and plan types for comparison purposes. Performance Ineligible Assets: Performance returns are not calculated for certain assets because accurate valuations and transaction data for these assets are not processed or maintained by us. Common examples of these include life insurance, some annuities and some assets held externally. Performance Statistics: A generic term for various measures of investment performance measurement terms. Portfolio Characteristics: A generic term for various measures of investment portfolio characteristics. Preferred Return: A term used in the private equity (PE) world, and also referred to as a "Hurdle Rate." It refers to the threshold return that the limited partners of a private equity fund must receive, prior to the PE firm receiving its carried interest or "carry." Ratio of Cumulative Wealth: A defined ratio of the Cumulative Return of the portfolio divided by the Cumulative Return of the benchmark for a certain time period. Regression Based Analysis: A statistical process for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables Residual Correlation: Within returns -based style analysis, residual correlation refers to the portion of a strategy's return pattern that cannot be explained by its correlation to the asset -class benchmarks to which it is being compared. Return: A rate of investment performance for the specified period. Rolling Percentile Ranking: A measure of an investment portfolio's ranking versus a peer group for a specific rolling time period (i.e. Last 3 Years, Last 5 years, etc.). R-Squared: The percentage of a portfolio's performance explained by the behavior of the appropriate benchmark. High R-Squared means a higher correlation of the portfolio's performance to the appropriate benchmark. SA/CF (Separate Account/Comingled Fund): Represents an acronym for Separate Account and Commingled Fund investment vehicles. Sector Benchmark: A market index that serves as a proxy for a sector within an asset class. Sharpe Ratio: Represents the excess rate of return over the risk free return divided by the standard deviation of the excess return. The result is the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk -adjusted performance results in. Standard Deviation: A statistical measure of the range of a portfolio's performance; the variability of a return around its average return over a specified time period. Total Fund Benchmark: The policy benchmark for a complete asset pool that could consist of multiple investment mandates. Total Fund Composite: The aggregate of multiple portfolios within an asset pool or household. Tracking Error: A measure of standard deviation for a portfolio's investment performance, relative to the performance of an appropriate market benchmark. Treynor Ratio: A ratio that divides the excess return (above the risk free rate) by the portfolio's beta to arrive at a unified measure of risk adjusted return. It is generally used to rank portfolios, funds and benchmarks. A higher ratio is indicative of higher returns per unit of market risk. This measurement can help determine if the portfolio is reaching its goal of increasing returns while managing market risk. Up Market Capture: The ratio of average portfolio returns over the benchmark during periods of positive benchmark return. Higher values indicate better product performance. Upside Semi Deviation: A statistical calculation that measures the volatility of returns above an acceptable return. This return measure isolates the positive portion of volatility: the larger the number, the greater the volatility. Value: A diversified investment strategy that includes investment selections which tend to trade at a lower price relative to its dividends, earnings, and sales. Common attributes are stocks that include high dividend, low price -to -book ratio, and/or low price -to -earnings ratio. Worst Quarter: The lowest rolling quarterly return for a certain time period. Information Disclosures Performance results are annualized for time periods greater than one year and include all cash and cash equivalents, realized and unrealized capital gains and losses, and dividends, interest and income. The investment results depicted herein represent historical performance. As a result of recent market activity, current performance may vary from the figures shown. Past performance is not a guarantee of future results. Please see the Morgan Stanley Smith Barney LLC Form ADV Part 2 Brochure for advisory accounts and/or any applicable brokerage account trade confirmation statements for a full disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. Benchmark indices and blends included in this material are for informational purposes only, are provided solely as a comparison tool and may not reflect the underlying composition and/or investment objective(s) associated with the account(s). Indices are unmanaged and not available for direct investment. Index returns do not take into account fees or other charges. Such fees and charges would reduce performance. The performance data shown reflects pastperformance, which does not guarantee future results. Investment return and principal will fluctuate so that an investor's shares when redeemed may be worth more or less than original cost. Please note, current performance may be higher or lower than the performance data shown. For up to date month -end performance information, please contact your Financial Advisor or visit the funds' company website. Investors should carefully consider the fund's investment objectives, risks, charges and expenses before investing. The prospectus and, if available the summary prospectus, contains this and other information that should be read carefully before investing. Investors should review the information in the prospectus carefully. To obtain a prospectus, please contact your Financial Advisor or visit the funds' company website. Past performance is no guarantee of future results. Investing involves market risk, including possible loss of principal. Growth investing does not guarantee a profit or eliminate risk. The stocks of these companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. Value investing involves the risk that the market may not recognize that securities are undervalued and they may not appreciate as anticipated. Small and mid -capitalization companies may lack the financial resources, product diversification and competitive strengths of larger companies. The securities of small capitalization companies may not trade as readily as, and be subject to higher volatility than those of larger, more established companies. Bond funds and bond holdings have the same interest rate, inflation and credit risks that are associated with the underlying bonds owned by the funds. The return of principal in bond funds, and in funds with significant bond holdings, is not guaranteed. International securities' prices may carry additional risks, including foreign economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes and differences in financial and accounting standards. International investing may not be for everyone. These risks may be magnified in emerging markets. Alternative investments, including private equity funds, real estate funds, hedge funds, managed futures funds, and funds of hedge funds, private equity, and managed futures funds, are speculative and entail significant risks that can include losses due to leveraging or\other speculative investment practices, lack of liquidity, volatility of returns, restrictions on transferring interests in a fund, potential lack of diversification, absence and/or delay of information regarding valuations and pricing, complex tax structures and delays in tax reporting, less regulation and higher fees than mutual funds and risks associated with the operations, personnel and processes of the advisor. Master Limited Partnerships (MLPs) are limited partnerships or limited liability companies that are taxed as partnerships and whose interests (limited partnership units or limited liability company units) are traded on securities exchanges like shares of common stock. Currently, most MLPs operate in the energy, natural resources or real estate sectors. Investments in MLP interests are subject to the risks generally applicable to companies in the energy and natural resources sectors, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk; and MLP interests in the real estate sector are subject to special risks, including interest rate and property value fluctuations, as well as risks related to general and economic conditions. Because of their narrow focus, MLPs maintain exposure to price volatility of commodities and/or underlying assets and tend to be more volatile than investments that diversify across many sectors and companies. MLPs are also subject to additional risks including: investors having limited control and rights to vote on matters affecting the MLP, limited access to capital, cash flow risk, lack of liquidity, dilution risk, conflict of interests, and limited call rights related to acquisitions. Mortgage backed securities also involve prepayment risk, in that faster or slower prepayments than expected on underlying mortgage loans can dramatically alter the yield -to -maturity of a mortgage -backed security and prepayment risk includes the possibility that a fund may invest the proceeds at generally lower interest rates. Tax managed funds may not meet their objective of being tax -efficient. Real estate investments are subject to special risks, including interest rate and property value fluctuations, as well as risks related to general and economic conditions. High yield fixed income securities, also known as "junk bonds", are considered speculative, involve greater risk of default and tend to be more volatile than investment grade fixed income securities. Credit quality is a measure of a bond issuer's creditworthiness, or ability to repay interest and principal to bondholders in a timely manner. The credit ratings shown are based on security rating as provided by Standard & Poor's, Moody's and/or Fitch, as applicable. Credit ratings are issued by the rating agencies for the underlying securities in the fund and not the fund itself, and the credit quality of the securities in the fund does not represent the stability or safety of the fund. Credit ratings shown range from AAA, being the highest, to D, being the lowest based on S&P and Fitch's classification (the equivalent of Aaa and C, respectively, by Moody(s). Ratings of BBB or higher by S&P and Fitch (Baa or higher by Moody's) are considered to be investment grade -quality securities. If two or more of the agencies have assigned different ratings to a security, the highest rating is applied. Securities that are not rated by all three agencies are listed as "NR". "Alpha tilt strategies comprise a core holding of stocks that mimic a benchmark type index such as the S&P 500 to which additional securities are added to help tilt the fund toward potentially outperforming the market in an effort to enhance overall investment returns. Tilt strategies are subject to significant timing risk and could potentially expose investors to extended periods of underperformance." Custom Account Index: The Custom Account Index is an investment benchmark based on your historical target allocations and/or manager selection that you may use to evaluate the performance of your account. The Custom Account index does take into consideration certain changes that may have occurred in your portfolio since the inception of your account, i.e., asset class and/or manager changes. However, in some circumstances, it may not be an appropriate benchmark for use with your specific account composition. For detailed report of the historical composition of this blend please contact your Financial Advisor. Peer Groups Peer Groups are a collection of similar investment strategies that essentially group investment products that share the same investment approach. Peer Groups are used for comparison purposes to compare and illustrate a clients investment portfolio versus its peer across various quantitative metrics like performance and risk. Peer Group comparison is conceptually another form of benchmark comparison whereby the actual investment can be ranked versus its peer across various quantitative metrics. All Peer Group data are provided by Investment Metrics, LLC. The URL below provides all the definitions and methodology about the various Peer Groups https://www.invmetrics.com/style-peer-groups Peer Group Ranking Methodology A percentile rank denotes the value of a product in which a certain percent of observations fall within a peer group. The range of percentile rankings is between 1 and 100, where 1 represents a high statistical value and 100 represents a low statistical value. The 30th percentile, for example, is the value in which 30% of the highest observations may be found, the 65th percentile is the value in which 65% of the highest observations may be found, and so on. Percentile rankings are calculated based on a normalized distribution ranging from 1 to 100 for all products in each peer group, where a ranking of 1 denotes a high statistical value and a ranking of 100 denotes a low statistical value. It is important to note that the same ranking methodology applies to all statistics, implying that a ranking of 1 will always mean highest value across all statistics. For example, consider a risk/return assessment using standard deviation as a measure of risk. A percentile ranking equal to 1 for return denotes highest return, whereas a percentile ranking of 1 for standard deviation denotes highest risk among peers. In addition, values may be used to demonstrate quartile rankings. For example, the third quartile is also known as the 75th percentile, and the median is the 50th percentile. Alternatives Graystone Consulting is a business of Morgan Stanley Smith Barney LLC. ("Morgan Stanley") This material is not to be reproduced or distributed to any other persons (other than professional advisors of the investors) and is intended solely for the use of the persons to whom it has been delivered. This material is not for distribution to the general public. The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be suitable for all clients. Any product discussed herein may be purchased only after a client has carefully reviewed the offering memorandum and executed the subscription documents. Morgan Stanley has not considered the actual or desired investment objectives, goals, strategies, guidelines, or factual circumstances of any investor in any fund(s). Before making any investment, each investor should carefully consider the risks associated with the investment, as discussed in the applicable offering memorandum, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. This information is being provided as a service of your Graystone Institutional Consultant and does not supersede or replace your Morgan Stanley customer statement. The information is as of the date(s) noted and subject to daily market fluctuation. Your interests in Alternative Investments, which may have been purchased through us, are generally not held here, and are generally not covered by SIPC. The information provided to you: 1) is included as a service to you, valuations for certain products may not be available; 2) is derived from you or another external source for which we are not responsible, and may have been modified to take into consideration capital calls or distributions to the extent applicable; 3) may not reflect actual shares, share prices or values; 4) may include invested or distributed amounts in addition to a fair value estimate; and 5) should not be relied upon for tax reporting purposes. Notwithstanding the foregoing, 1) to the extent this report displays Alternative Investment positions within a Morgan Stanley Individual Retirement Account ("IRA"), such positions are held by Morgan Stanley Smith Barney LLC as the custodian of your Morgan Stanley IRA; and 2) if your Alternative Investment positon(s) is held by us and is registered pursuant to the Securities Act of 1933, as amended, your Alternative Investment position(s) is covered by SIPC. Alternatives may be either traditional alternative investment vehicles or non-traditional alternative strategy vehicles. Traditional alternative investment vehicles may include, but are not limited to, Hedge Funds, Fund of Funds (both registered and unregistered), Exchange Funds, Private Equity Funds, Private Credit Funds, Real Estate Funds, and Managed Futures Funds. Non-traditional alternative strategy vehicles may include, but are not limited to, Open or Closed End Mutual Funds, Exchange -Traded and Closed -End Funds, Unit Investment Trusts, exchange listed Real Estate Investment Trusts (REITs), and Master Limited Partnerships (MLPs). These non-traditional alternative strategy vehicles also seek alternative -like exposure but have significant differences from traditional alternative investment vehicles. Non-traditional alternative strategy vehicles may behave like, have characteristics of, or employ various investment strategies and techniques for both hedging and more speculative purposes such as short -selling, leverage, derivatives, and options, which can increase volatility and the risk of investment loss. Characteristics such as correlation to traditional markets, investment strategy, and market sector exposure can play a role in the classification of a traditional security being classified as alternative. Traditional alternative investment vehicles are illiquid and usually are not valued daily. The estimated valuation provided will be as of the most recent date available and will be included in summaries of your assets. Such valuation may not be the most recent provided by the fund in which you are invested. No representation is made that the valuation is a market value or that the interest could be liquidated at this value. We are not required to take any action with respect to your investment unless valid instructions are received from you in a timely manner. Some positions reflected herein may not represent interests in the fund, but rather redemption proceeds withheld by the issuer pending final valuations which are not subject to the investment performance of the fund and may or may not accrue interest for the length of the withholding. Morgan Stanley does not engage in an independent valuation of your alternative investment assets. Morgan Stanley provides periodic information to you including the market value of an alternative investment vehicle based on information received from the management entity of the alternative investment vehicle or another service provider. Traditional alternative investment vehicles often are speculative and include a high degree of risk. . Investors should carefully review and consider potential risks before investing. Certain of these risks may include but are not limited to:• Loss of all or a substantial portion of the investment due to leveraging, short - selling, or other speculative practices;- Lack of liquidity in that there may be no secondary market for a fund;- Volatility of returns;- Restrictions on transferring interests in a fund;- Potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized; - Absence of information regarding valuations and pricing;- Complex tax structures and delays in tax reporting;- Less regulation and higher fees than mutual funds; and- Risks associated with the operations, personnel, and processes of the manager. As a diversified global financial services firm, Morgan Stanley Wealth Management engages in a broad spectrum of activities including financial advisory services, investment management activities, sponsoring and managing private investment funds, engaging in broker - dealer transactions and principal securities, commodities and foreign exchange transactions, research publication, and other activities. In the ordinary course of its business, Morgan Stanley Wealth Management therefore engages in activities where Morgan Stanley Wealth Management's interests may conflict with the interests of its clients, including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund. Indices are unmanaged and investors cannot directly invest in them. Composite index results are shown for illustrative purposes and do not represent the performance of a specific investment. Past performance is no guarantee of future results. Actual results may vary. Diversification does not assure a profit or protect against loss in a declining market. Any performance or related information presented has not been adjusted to reflect the impact of the additional fees paid to a placement agent by an investor (for Morgan Stanley placement clients, a one-time upfront Placement Fee of up to 3%, and for Morgan Stanley investment advisory clients, an annual advisory fee of up to 2.5%), which would result in a substantial reduction in the returns if such fees were incorporated. For most investment advisory clients, the program account will be charged an asset -based wrap fee every quarter ("the Fee"). In general, the Fee covers investment advisory services and reporting. In addition to the Fee, clients will pay the fees and expenses of any funds in which their account is invested. Fund fees and expenses are charged directly to the pool of assets the fund invests in and impact the valuations. Clients must understand that these fees and expenses are an additional cost and will not be included in the Fee amount in the account statements. As fees are deducted quarterly, the compounding effect will be to increase the impact of the fees by an amount directly related to the gross account performance. For example, for an account with an initial value of $100,000 and a 2.5% annual fee, if the gross performance is 5% per year over a three year period, the compounding effect of the fees will result in a net annual compound rate of return of approximately 2.40% per year over a three year period, and the total value of the client's portfolio at the end of the three year period would be approximately $115,762.50 without the fees and $107,372.63 with the fees. Please see the applicable Morgan Stanley Smith Barney LLC Form ADV Part 2A for more information including a description of the fee schedule. It is available at www.morganstanlev.com/ADV <httn://www.morizanstanlev.com/ADV> <http://www.morganstanley.com/ADV> or from your Financial Advisor/Private Wealth Advisor. Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributing important tax information. Individual funds have specific risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley does not provide tax or legal advice. Interests in alternative investment products are offered pursuant to the terms of the applicable offering memorandum, are distributed by Morgan Stanley Smith Barney LLC and certain of its affiliates, and (1) are not FDIC -insured, (2) are not deposits or other obligations of Morgan Stanley or any of its affiliates, (3) are not guaranteed by Morgan Stanley and its affiliates, and (4) involve investment risks, including possible loss of principal. Morgan Stanley Smith Barney LLC is a registered broker -dealer, not a bank. SIPC insurance does not apply to precious metals, other commodities, or traditional alternative investments. © 2018 Morgan Stanley Smith Barney LLC. Member SIPC. Money Market Funds You could lose money in Money Market Funds. Although MMFs classified as government funds (i.e., MMFs that invest 99.5% of total assets in cash and/or securities backed by the U.S government) and retail funds (i.e., MMFs open to natural person investors only) seek to preserve value at $1.00 per share, they cannot guarantee they will do so. The price of other MMFs will fluctuate and when you sell shares they may be worth more or less than originally paid. MMFs may impose a fee upon sale or temporarily suspend sales if liquidity falls below required minimums. During suspensions, shares would not be available for purchases, withdrawals, check writing or ATM debits. A MMF investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or other government agency. Graystone Consulting- A business of Morgan Stanley City of Sebastian Police Officers' Retirement Plan Quarterly Performance Report As of September 30, 2020 Scott Owens, CFA@, CIMA@ David Wheeler, CIMA@, CFP@, CRPS@ Andy McIlvaine Senior Vice President - Wealth Management Senior Vice President - Wealth Management Institutional Consultant Institutional Consulting Director Institutional Consulting Director Financial Advisor - Wealth Management Scott.Owens@msgraystone.com Alterative Investment Director Andy.McIlvaine@msgraystone.com (813) 227-2027 Corporate Retirement Director (813) 227-2160 David.Wheeler@msgraystone.com (813)227-2178 Graystone Page 1 Consulting'" WEALTH MANAGEMENT Morgan Stantey Quarter in Review 3Q 2020 As of October 1, 2020 After a sharp rally in the second quarter as the global economy moved towards recovery, the third quarter saw continued modest gains despite volatility in September. The S&P 500 gained 8.9% on the quarter and sitsjust -o.3% from its February 191h peak. The Bloomberg Barclays US Aggregate Bond Index gained o.62% as the yield on a 10-yearTreasury is hovering around its low bound range off o.68%, down from a relative high of 3.22% in November 2o18.30-year Treasuries had a similar move, with yields coming down to 1.5% from 3.45% in November 2018. September saw a stretch of volatility that dampened momentum. The September selloff was catalyzed by a trifecta of investor uncertainties. First, dwindling prospects for the passage of a second fiscal stimulus plan before November 3, which is especially unlikely now that Congress is preoccupied with election -year politics and debate over the Supreme Court vacancy, the Fed's ambiguity on Quantitative Easing and average inflation targeting details, and finally, the presidential election results but also its validity and timing of a definitive result. Further, there is a lack of momentum in the job market with weekly unemployment claims remaining stagnant near goo,000. Coronavirus continued to disrupt global economies. As the virus continued to spread within the US and the rest of the world, total cases have passed 30 million with over 1 million deaths. The looming potential for a second wave in the US as schools reopen and we approach the colder season as well as the status of a much -anticipated Covid vaccine contributes to investor uncertainty heading into 4Q20. Position for a V-shaped recovery. Michael Wilson, CIO of Morgan Stanley & Co., reiterated conviction in the view that a new cyclical bull market for equities has begun despite the September correction. It is common for markets to have a powerful rally off of the trough of a recession as in 21020 . Valuations often expand ahead of the earnings increase and then the earnings catch up, making a correction inevitable. Even though the volatility seen in September is expected to remain high in the short term due to investor uncertainties, they should be resolved by year-end, clearing the way for continued V-shaped recovery in 2021. Source: Morgan Stanley Wealth Management Investment Resources Market Research & Strategy Team Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or o1 in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Pag&rITH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW Graystone Consulting'" WEALTH MANAGEMENT Morgan Stantey Capital Markets Performance Capital Market Returns As of September 30 2020; Private Real Estate as of March 31, 2020 ASSET CLASS INDEX IN USD 3-MONTH YTD i-YR 3-YR ANN 5-YR ANN Global Equity Global Equity MSCI All Country World 8.3% 1.8% 11.0% 7.7% io.8% US Equity S&P 500 8.9% 5.6% 15.1% 12.2% 14.1% International Equity MSCI All Country World ex US 6.4% -5.1% 3.4% 1.6% 6.6% Emerging Markets Equity MSCI Emerging Markets 9.7% -0.9% 10.9% 2.8% 9.2% Global Fixed Income Investment Grade Fixed Income Barclays US Aggregate o.6% 6.8% 7.0% 5.2% 4.2% Inflation -Linked Securities Barclays Universal Govt Inflation -Linked 1.0% 7.5% 4.6% 6.1% 5.5% High Yield Barclays Global High Yield (H) 3.6% -1.0% 2.0% 3.2% 6.4% Emerging Markets Fixed Income JP Morgan EM Bonds (UH in USD) 0.6% -6.3% -1.4% 0.8% 1.9% Alternative Investments Global REITs FTSE EPRA/NAREITGlobal REITs 2.0% -19.5% -16.6% -0.8% 3.3% Commodities Bloomberg Commodities 9.1% -12.1% -8.2% -4.5% -3.1% MLPs Alerian MLP -16.3% -46.2% -48.4% -21.0% -12.4% Hedged Strategies HFRX Global Hedge Fund Index 2.7% 1.6% 4.2% 1.5% 2.1% Managed Futures HFRX Macro/CTA Index o.8% 0.0% -0.2% 1.4% 0.1% Private Real Estate NCREIF Private Real Estate - 0.7% 6.4% 6.7% 8.2% Global Cash Cash Citigroup 3-month Treasury Bill 0.0% 0.6% 1.0% 1.6% 1.2% Other Fixed Income Municipal Fixed Income Barclays Municipal Bond 1.2% 3.3% 4.1% 4.3% 3.8% Source: FactSet, Morgan Stanley Wealth Management GIC. For more information about the risks to Master Limited Partnerships (MLPs), please refer to the Risk Considerations section at the end of this material. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of Graystone in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Consultin '"' PagdN�LTH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW �j EM Equities MLPs MLPs REITs US Equities REITs US Equities MLPs EM Equities US Debt US Equities Inflation -Linked US Equities MLPs 82.9% 35.9% 13.9% 29.8% 32.4% 14.7% 1.4% 18.3% 37.3% I 0.0% 31.5% 9.2% 13.6% MLPs EM Equities Inflation -Linked High Yield MLPs US Equities DM Int'I Equities High Yield DM Int'I Equiti DM Int'I Debt REITs US Debt REITs Commod. 76.4% 20.2% 13.6% 1g.6% 27.6% 13.7% 0.9 % 14.3% 26.7% -o.8% 23.6% 6.8 % 8.9% 13.6% High Yield US Debt EM Equities DM Int'I Equities Managed US Debt US Equities US Equities Inflation -Linked DM Int'I Equities US Equities High Yield US Equities Futures 59.4% 7.8 19.1% o% 12.3% 0.5% 12.0% 21.8% -1.3% 23.1% 5.6% 7.3% 12.4% REITs Commod. DM Int'I Debt DM Int'I Equitie • US Debt REITs Commod. EMD High Yield • DM Int'I Debt REITs 41.3% 16.8% 6.o% 18.2% 6.0% -0.4% 11.8% 15.2% -4.1% 5.1% 1z.o% Hedged Managed ged DM Int'I Equities EMD High Yield EMD MLPs EM Equities REITs US Equities EM Equities DM Int'I Equities EM Equities Strateqies Futures Strateqies 33.9% 15.7% 3.1% 16.8% 8.8% 4.8% -0.9% 10.3% 15.0% -4.4% 18.1% 1.8% 6.4% 11.9% US Equities US Equities US Equities US Equities High Yield • Inflation -Linked EMD • Managed EMD Managed US Debt DM Int'I Equities 26.5% 15.1% 2.1% 16.0% 7.3% -1.4% 9.9% Futures -4.6% 13.5% Futures o.o% 4'3 o/ 11.5% High Yield EMD M REITs Inflation -Linked High Yield REITs High Yield MLPs 14.8% -1.8% 2.2% 3.6%0 10.4% -5.5% 12.6% 4.2% EMD • • Inflation -Linked Managed Hedged High Yield Inflation -Linked DM Int'I Debt • US Debt High Yield EM Equities DM Int'I Debt Futures Strategies 22.0% 7.0% 0.7% 3.4% -2.7% Commod. DM Int'I Equitie Managed MLPsz EM Equities High Yield d REITs Hedged EMD Hedged EM Equities High Yield Futures Strategies Strateqies Strategies Strategies 18.9% 9.8% Hedged DM Int'I Debt Hedged Hedged US Debt EM Equities DM Int'I Debt US Debt US Debt Hedged Inflation -Linked ities Inflation -Linked Managed Futures Strategies Strategies Strategies Strategies 11.5% 7.0% -5.7% 4.8% -z.o% -1.4% -y.y°/a 2.6% 3.5% -7.0% 8.4% 3.4% 6.5% Hedged Inflation -Linked US Debt REITs US Debt DM Int'I Debt DM Int'I Debt EM Equities Inflation -Linked Commod. Commod. EMD EMD Hedged Strategies Strategies 11.4% 6.5% -8.1% 4.2% -5.6% -3.0% -13.5% 2.5% 3.0% -11.2% 7.7% -6.3% 2.7% 4.8% Managed Managed US Debt DM Int'I Equities DM Int'I Debt Inflation -Linked M Int'I Equities EMD DM Int'I Debt Commod. MLPs Commod. DM Int'I Debt Inflation -Linked Futures Futures 5.9% 6.4% -12.2% 0.5% -8.6% -4 % -14.9% 2.1% 1.7% -12.4% 6.7% -12.1% 1.4% 4.3% DM Int'I Debt Inflation -Linked Commod. Commod. EMD EMD Commod. M Int'I Equ Managed DM Int'I Equities REITs Managed EMD Futures Futures 3.7% 6.3% -13.3% -1.1% -9.0% -5.7% -24.7% 1.6% -0.8% -14.0% 6.6% -19.5% o.8% 3.7% Managed Hedged EM Equities Managed Commod. Commod. MLPs Managed MLPs EM Equities DM Int'I Debt MLPs Commod. US Debt Futures Strateqies Futures Futures -4.8% 4.2% -19.2% -1.8% -9.5% -17.0% -32.6% -4.4% -6.5% -14.7% 4.6% -46.2% -4.7% 1.9% WEALTH MANAGEMENT Morgan Stanley S&P 500Sector Performance and Valuation All US sectors, with the exception of Energy, were up in 3Q after all being up in the second quarter of 2020. Consumer Discretionary, Materials, and Industrials were the top -performing sectors, returning 14.9%, 12.7%, and 12.o%, respectively. Laggards this quarter included Financials, Real Estate, and Energy, which returned 3.8%, 2.6%, and-20.9%, respectively As of October 1, 2020 S&P 500 Consumer Consumer Financials Tech. Healthcare Industrials Energy Comms Utilities Materials Real Estate Index Disc. Staples S&P Weight ioo.o% 9.7% 28.2% 14.2% 8.3% :Li.6% 7.0%.:' I YTD Return 5.6% -20.2% 28.7% 5.0% -4.0% - 23.4% 4.1% 8.6% -5.7% 5.5% -6.8% 30 202o Return 8.9% 4.4% 12.0% 5.9% 12.5% -19.7% 15.1% 10.4% 8.9% 6.1% 13.3% 1.9% Ret. since Top Top (February 020) 0.5 -21.1 14.8 2.9 -7.0 -43.0 16.o 1.5 2.0 -13.1 7.1 -12.6 Ret. since Low (March 2020) 51.7 38.2 66.8 42.7 59.5 29.3 69.8 33.6 42.8 34-9 67.5 40.4 Beta to S&P 5oo 1.00 1.36 1.09 0.74 1.19 1.21 1.14 0.58 o.68 0.45 1.23 - Fwd. PIE Ratio 21.3x 10-Yr Average 15.4x PB Ratio 3.1 10-Yr Average 2.7 Dividend Yield 2.0% 13.4x 26.ox 12.2x 15.9x 14.7x 15.6x 26.ox 18.6x 17.7x 1.0 7.4 4.3 3.9 1.0 8.o 5.7 1.3 2.7% 10-Yr Average 1.9% 1.7% 21.9x . • 15.2x 16.1x 15.ox 18.ox 3.2 2.0 2.1 3.4 4.0 3.7 3.2 1.9 3.7 4.3 2.3 1.3% 1.7% 2.3% 6.1% 1.3% 2.9% 1.3% 1.3% 1.8% 2.1% 2.7% 1.3% 2.8% 4.3% 1.8 2.7 3.0 3.5% 2.3% 3.1% 3.7% 2.1% N/A Source: Factset, Bloomberg, Morgan Stanley & Co. Research, Morgan Stanley Wealth Management Investment Resources Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Graystone PagdNSILTH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW ConsuhingSM WEALTH MANAGEMENT Morgan Stanley Contributions to S&P 500 Sector Performance US Equity sector performance was largely attributed to multiple expansion as multiples bottomed in the first quarter and weaker earnings due to a COVID induced recession were largely priced in. As of October 1, 2020 70% 6o% 50% 40% 30% 0.1% 20% 10% O% -10% -20% -30% ♦ 52.3% ■ ■ A NTM EPS A NTM P/E ■ Dividend Yield ♦ Price Return ♦ 45.2% Tr1.2% ♦ 30.4% ♦ 30.0% 00"9.2% 00"7.6% o ♦ 15.7 /o • 13.7% .8% ■ S&P 500 Consumer Information Materials Industrials Comm. Health Care Consumer Financials Real Estate Discretionary Technology Services Staples Source: FactSet, Bloomberg, Morgan Stanley & Co. Research, Morgan Stanley Wealth Management Investment Resources Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Pag&VITH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW utilities Energy Graystone Consulting'" WEALTH MANAGEMENT Morgan Stanley Equities Outperformance of Defensives and Quality Heightens Small caps, cyclicals, and junk began to outperform in the second quarter as COVID fears began to slow and investors moved towards pro -recovery trades. Growth continued to outperform value , though there was a brief rotation towards value during the quarter. Small Cap Vs. Large Cap As of October 1, 2020 1.10 Small Cap 1 Outperforms 1.00 0.90 o.8o 1 . 0.77 0.70 Mar'17 Sep'17 Mar'18 Sep'18 Mar'1g Sep'1g Mar'20 Sep'20 Cyclicals Vs. Defensives As of October 1, zozo 1.20 1.00 o.8o o.6o Cyclicals ? Outperform )5 0.40 Mar'27 Sep'17 Mar'18 Sep'18 Mar'1g Sep'19 Mar'20 Sep'20 Growth Vs. Value As of October 1, 2020 1.80 1.70 1.6o 1.50 1.40 1.30 1.20 1.10 1.00 0.90 Mar'17 66 Sep'17 Mar'18 Sep'18 Mar'1g Sep'1g Mar'20 Sep'20 Quality Vs. Junk As of October 1, zozo 1.20 1.15 Quality 1.10 Outperforms 1.05 o.98 1.00 0.95 0.90 o.85 Apr'18 Aug'18 Dec'18 Apr'19 Aug'1g Dec'1g Apr'2o Aug'20 Source: FactSet, Bloomberg. Small cap is represented bythe Russell 2000 Index; Large cap is represented bythe Russell i000 Index; Growth is represented bythe Russell i000 Growth Index; Value is represented by the Russell i000 Value Index; cyclicals, defensives, quality andjunk are based on Morgan Stanley & Co. analysis. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Graystone Pag&7ALTH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW ConsuhingsM WEALTH MANAGEMENT US Equities Earnings Estimates MS & Co. CIO Mike Wilson held his 12-month forward S&P 500target at 3,35o during the quarter. Morgan Stanley & Co. 2020 S&P Soo Target & Sector Recommendations As of October i, zozo Morgan Stanley 12-Month S&P Price Target Methodology MS&Co EPS Target 2020 Upside / Landscape EPS Est. Multiple Price Target (Downside) Morgan Stanley Equities Morgan Stanley & Co. and Consensus S&P Soo Earnings Estimates As of October 1, zozo $163 $163 Bull Case $139 21.ox 3,700 10.0% Base Case $130 20.ox 3,350 (0.4%) $3.27 Bear Case $119 19.ox 2,900 (13.8%) Current S&P Soo Price 3363 2o18 2019 2020 Overweight Industrials Materials Financials Healthcare ■ Consensus Neutral Communication Consumer Energy Real Estate Services Discretionary Underweight Consumer Staples Technology Utilities $158 $130 MS&Co MS&Co Target 202o Target 2021 Est. Est. MS Estimates Source: Morgan Stanley & Co., FactSet, Thomson Reuters, Morgan Stanley Wealth Management GIC. (1) Green/red text denotes sector total return and dividend yield higher/lower than S&P 500. (2) Dark blue/light blue/grey fill denotes whether current relative NTM P/E is low/neutral/high relative to history. Real Estate is from io/31/2001 to present.3) The S&P 2oi8 target is using MS & Co.'s zoig earnings estimate. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Graystone Pag&VITH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW ConsuhingsM WEALTH MANAGEMENT Morgan Stanley S&P 50o Earnings Estimates Equities Consensus estimates of year -over -year EPS growth predict declines of over lo% during the first half of 2020, though earnings declines are forecasted to have troughed in the 20, setting up a sequential recovery through 2H zo and '21. S&P 500 As of October 1, 2020 30% 20% O% ■ ' — I -10% -20% -30% -40% S&P Soo Ex -Energy As of October 2, 2020 30% 11.5% 20% 13.2% I io% o% ■ _ ■ _ ■ I I I I -20% -30% LnWtDWW r�NNr�°o°o°o°o 0)m0)0)0wwww ri rl rl rl ri ri rl ri ri rl rl rl rl ri rl H rl N O O O rl aaaaaaaaaaaaaaIt rl aaaIr aaa"aa" N rn .t ri ■ S&P 5oo Y/Y EPS Growth S&P Soo Ex -Energy and Financials As of October 1, 2020 25% 20% 15% 10% -5% -io% -15% -20% -25% LnWkD9.0tc r�r�' ooaowao mmmm0wwww rl rl ri ri ri rl ri rl ri rl rl ri ri ri ri ri ri N O O O ri aaaaaaaaaaaaaaaaaaaaaa N rn It ri ■ S&P 5oo Ex -Energy Y/Y EPS Growth LnW c0-.0W l�I",r, �°000°oW mrnmrn0wwww ri rl rl rl ri ri ri ri rl rl ri rl ri rl rl ei rl N O O O rl aaarn aadaaaaN rn It H aaaaaadaaaaa" N M It ri ■ S&P 5oo Ex -Energy and Financials Y/Y EPS Growth Source: Thomson Financial, S&P, Morgan Stanley & Co. Research. As of 10/4/2oi8, data has been reclassified into new GICS sectors. Historical data restated from 2013 onward. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. PagdV911TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW Graystone Consulting'" WEALTH MANAGEMENT Morgan Stanley Equities Equity Risk Premium Back Within MS & Co.'s FairValue Range After blowing out in iQ as equities sold -off and treasuries rallied, ERPs have moved lower as equities recovered in the second quarter and third quarter while forward earnings estimates declined. Even with the rally however, ERPs remains towards the higher -end of MS & Co.'s target range of 325 — 450 bps. S&P Soo Equity Risk Premium, Daily data as of October 1, 2020 700 65o ... 550 500 450 400 350 300 397 250 15 y'S y� ,yVc 1Y* 11* yh 4) 4) 4) y10 b y� yb ,y1 y1 y1 iY1 y`6 y� y`� y`� y� y� y�i y�i ,y0 ,y0 ,y0 C��� Oe� �a� ���` �eQ ��� �a� ,J� �eQ Qe� fat ���` �eQ ��� �a� ���` CIe� Qeo le Cep 4ee Source: Bloomberg, Morgan Stanley & Co. Research. (i) Equity risk premium is based on the spread between the io-year treasury yield and the S&P Soo earnings yield using consensus next twelve month earnings. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of Graystone in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. PagdvII)TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW Consulting'" WEALTH MANAGEMENT Morgan Stanley Equities US Equities Appear High As Result Of Large Drop In Near -Term Earnings Traditional valuation metrics show stocks as expensive as near -term forecasts have been slashed as a result of lockdowns. As a result, forward P/E on S&P 500 is at near two -decade highs; however, as earnings normalize, stocks will no longer look as expensive. S&P Soo Forward P/E Ratio Weekly Data as of September 25, 2020 28 26 �4 22 20 8 1 , , 16 Average �4 12 +i Std Dev a 10 1995 1998 2001 2004 2007 2010 2013 2016 2029 S&P Soo EV-to-Sales Ratio Weekly Data as of September 25, zozo 3.25 3•00 25 2.75 I 1 2.50 2.25 Avera 2.00 1.75 1.50 1.25 +i Stcl Dev ,)Y -1 Strl r_­ Y 1.00 1995 1998 2000 2003 2006 2008 2011 2013 2016 2018 Source: Bloomberg, FactSet, Morgan Stanley Wealth Management. Standard deviation (volatility) is a measure of the dispersion of a set of data from its mean. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. PagdVjjTH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW 2.8 Graystone Consulting'" WEALTH MANAGEMENT Morgan Stantey Fixed Income Fixed Income Performance and Spreads Fixed income returns have generally been strong in 202o as a result of the move lower in rates, though credit spreads have still widened year-to-date. Into the Third Quarter, spreads contracted from cycle highs following the 10 20 sell-off. YTD Total Return 1 As of October i, 2020 25% 21.8% 20% 15% 11.4% 10% 5% 0% -5% -10% 6.6% 6.0% 5.8% 4.4% 3.3% . O.6% -6.3% ayJz� ayJ 0`�0 0, ol�, `ova ay 0�_A:1 a OQ pia pia go �tJh a�Jh �aa O o�e�e`� ocQ°�a �i`+e o�.•�•Q Jh� �`Qeo o Ja � � C. C� � �• oaN �a ��o� �ro� Yield Spreads Vs. Past 20 Years 2 As of October 1, 2020 Short Term Fixed Income 3o-Year US Treasury Municipal Bonds US Investment Grade Corporate US High Yield Global Sovereign Bonds Global Corporate Bonds Emerging Markets Debt -s -211 t i 97 -43 75 -27 t — W 138 55 9 -148 t i 16 } 229 -20 77 41l ! 606 137 7 238 0--H� i 1,833 452 -8 -180 t 13 i♦ o 181 55 &--I�F4 1 506 4 0 �33 f 1,305 347 As of June 30, 2020 Median Min t 4 Max Source: FactSet, Bloomberg, Morgan Stanley Wealth Management GIC. (i) Indices used forth is analysis include: Bloomberg Barclays US High Yield, Bloomberg Barclays US Gov/Credit Float Adjusted 1-5Y Bond (short duration), Bloomberg Barclays Global Aggregate Credit -Corporate, JP Morgan GBI-EM Global Diversified (EM debt), Bloomberg Barclays US Investment Grade Corporate, Bloomberg Barclays Muni Bond, and Bloomberg Barclays Global Aggregate Government (global sovereign). (2) Yield spread ranges are based on 20 years of data. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or 01 Graystone in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. '"' pagdNIA�'.TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW Consultin �j WEALTH MANAGEMENT Morgan Stanley Fixed Income Corporate Spreads by Rating Both Investment Grade and HighYield spreads widened to their highest levels since the Global Financial Crisis in iQ, though they have partially recovered since, through 30 Investment Grade and High Yield Credit OAS, Monthly Data as of September 30, 2020 Investment Grade (Left Axis) 700 High Yield (Right Axis) 600 500 V) 41 0400 d LA N m 300 200 100 0 2002 2004 2007 2010 2013 2016 2019 Corporate OAS Vs. Average Monthly Data as of September 30, 2020 1,200 2,000 ■ Monthly Data as of 09/30/2020 20-Year Average 1,800 1,000 951 969 i, 600 800 1,400 1,200 Ln 41 600 o 0 540 540 1,000 d CL ,� ,n N ra 80o m M m 400 3877 517 600 202 200 173 136 400 102 1041 39 81 ' 200 , , 0 AAA AA A BAA BA B CAA 0 Bond Rating Source: FactSet, Morgan Stanley & Co. Research. (i) Option Adjusted Spread (OAS) is a measurement of the spread of a fixed -income security rate and the risk -free rate of return, which is adjusted to take into account an embedded option. Investment Grade and High Yield are Bloomberg Barclays indices. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Graystone Page 7 JTH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW ConsuhingSM WEALTH MANAGEMENT Morgan Stanley USYields Fixed Income Yields collapsed in the first quarter of zo as markets priced in pandemic and recession. Despite the risk -on moves in other asset classes, yields finished 20 little changed, still in range of historic lows, as the Fed pledges to continue monetary stimulus and keep policy rates low through at Ieast '22. Historical US Treasury Yields by Maturity As of September 30, 2020 17% — 2-Yr 16% 5-Yr �5% io-Yr 14% 3o-Yr 13% 12% 11% 10% g% 8% 7% 6% 5% 4% 3% 2% 1% 0% ig8o 1984 1988 1992 1996 2000 2004 20o8 2022 2oi6 US Treasury Yield Curves As of October 1,2020 4% 3% 2% I% 0% 1 ti Market Low on March g, 2009 1 Year Ago US Treasury Yield Spreads As of October 1, 2020 390 yt. 3°. Rates Bottom on July 8, 2oi6 Current UST �90 J� Igo , _ 1.46% go J . -10 0.28% 0 °°� °y° °yti °yti °y3 °y)x Oyh oy� °y1 °y� 0.13 �0 ti 'Y 'L ti ti ti 'Y 'Y ti ti ti 2-Yr / 5-Yr Spread 2-Yr / io-Yr Spread Source: FactSet, Bloomberg, US Department of the Treasury, Morgan Stanley Wealth Management GIC Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. PagdV14TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW 129 bps 55 bps 14 bps 2-Yr/3o-YrSpread Graystone Consulting'" WEALTH MANAGEMENT Morgan Stanley Muni Performance Fixed Income As of October 1, 2020 Following last spring's historic volatility, positive tax-exempt price momentum helped the market to firmly advance throughout July and early August. Supported by declining USTreasury (UST) rates, a stronger -than -anticipated pace for economic recovery, and a favorable seasonal backdrop, valuations for high -quality municipals climbed to record highs, with lo-YearAAA-rated yields marking a low of 58 basis points on August 7th. However, this price recovery stalled once UST yields moved higher and stimulus hopes faded, which helped to pare gains and chaperone the first month of negative total returns since April. Following this brief period of Zo to 3o basis -point weakness across the yield -curve, the market remained immensely stable as itjourneyed through quarter -end. The outlook is now cloudier at thisjuncture. The prospect for another round of much -anticipated federal aid has diminished, while the summer's seasonal tailwinds are behind us. We may now stand on the brink when some credit hurdles, particularly in low -rated issuers that do not provide services essential for the public benefit, may soon come to the fore. As discussed in our most recent Municipal Bond Monthly —On Our Watch, we encourage investors to stay very close to professional advisors, continue to leverage the current period of stability to review accounts and finish cleanup trades, add a modest amount of high - quality exposure this autumn (following recent weakness), and remain prepared for opportunity if broad market price volatility affects very strongly -rated issuers moving forward. Municipal Bond Annual Returns As of June 30, 2020 15% 11.7% 10% 9.2% 5% /o , 4 4° 5.1% 0% 12.9% 9.6% 10.7% 1% 9• 6.8% 5.3%4:035%4. %34% 3.3% 2�i0 � � 7.5% 5.4% o 0 1.3%L2.1%, 0.2 /o o -2.1% -2.5% -2.6% -5 /o ti°PA �CP o ytiti �o* 0h 01 o� yti 0od°P o oo o 1°5 o odo dly Source: Morgan Stanley Wealth Management Municipal Research, Refinitiv Municipal Market Data as of io/2/19 Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or o1 Graystone in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. �i Consultin -"S Page ,�V7lI�TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW �j WEALTH MANAGEMENT Morgan Stantey MSCI Developed Markets Performance Developed markets equities continued to rally in 30, building off of momentum from the zQ recovery and Initial iQ dip Performance as of September 30, 2020 Performance as of September 30, 2020 Valuation Quarter to Date and Trailing 12-Month Total Return P/E Index in USD ■QTD ■T12M Fwd 12M L/T Avg Div Yld MSCI World Index 8.2% 11.0% 0 1 1 9 1 4.34 2.1/0 ° MSCI US 9.6% 17.1/o 0 22.0 15.81 1.7% MSCI Canada ° 6'7% -1.9/o 1&1 15.09 3.3% MSCI Austria -29.0/° ° -4.9% 1o.8 1o.63 o.6% 9� MSCI Belgium 1.9% -22.7% 1 9.9 1 01 4� 2. % 3 MSCI Denmark 15.2% as.o i° 26.o 16.34 3° 1. /° MSCI Finland 11138% 18.5 14.88 2.9% MSCI France -5.7% - z.8% 17.4 12.81 2.2% MSCI Germany 8• io.s% 16.2 11.97 2.6% MSCI Ireland 14.5%21.1% 23.0 27.45 1.2% MSC Israel -2.0% 3.7% 12.0 1 5.95 1.0% MSCI Italy -9.6% 1.4% 14.0 11.12 2.7% MSCI Netherlands 5.8% 12.8% 20.4 12.93 1.5% MSCI Norway -13.0% 8.3/ 15.5 11•58 3.3% MSCI Portugal -3.5% 3.2% 17-7 14.23 4.8% MSCI Spain -19.3% -3.4% 14.0 11.67 4.2% MSCI Sweden 14.4% 23.0% 18.9 14.23 1.1% MSCI Switzerland - 4.8% 11.7 % 3.8. 3 1 4.39 2.8% MSCI UK -15.6 -0.5% • 14.1 12.09 4.2% MSCI Hong Kong 1 si - 1.6% 15.9 15.15 3.2% MSCI Australia % 7 3.2�° -6.5 � 3.8.3 14.10 5.1% MSCI Japan 72 17.5 15.05 2.2% MSCI New Zealand -0.6% 23_7°u ' 3 8.o 16.8 9 2.2% MSCI Sinqapore -,A,°, -1.0% i3.8 13.45 4.7% Source: MSCI, Bloomberg. Returns are in USD. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. PagdV%TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW International Graystone Consulting'" WEALTH MANAGEMENT Morgan Stantey MSCI Emerging Markets Performance EM equities saw continued modest gains in 3Q Performance as of September 30, 2020 Index in USD MSCI Emerging Markets MSCI Brazil MSCChile MSCI Colombia -3 MSCI Mexico MSCI Peru MSCI Czech Republic MSCI Egypt MSCI Greece MSCI Hungary MSCI Poland MSCI Qatar MSCI Russia MSCI South Africa MSCI Turkey MSCI U.A.E. MSCI China MSCI India MSCI Indonesia MSCI Korea MSCI Malaysia MSCI Pakistan MSCI Philippines MSCI Taiwan MSCI Thailand Performance as of September 30, 2020 Quarter to Date and Trailing 12-Month Total Return ■QTD ■T12M 9.7% 10.8% -3.3% ..3 % -4.2 ..1 % -1.2 4.6% -20.4% 3.5% -22.2% -5.0 -20.9 % 4.7 % -13.4% 3.0% -29.2 % -22.6 % -9.2 % -20.7 % -0.8% 7.5 % -2.6 % -4.3 -15.2 % 3.7 % -10.6 % -15.6 % -29.7 % 6.2% -11.8 % 12.6 % 15.5 % 0.7 % -5.6 -24.9% 12.5% 19.2 % -18.3 % -13.8 -29.8% 2.6 % -2.9 % 12.4 % -1.9% -2.7 17.0% Valuation P/E Fwd 12M L/T Avg Div Yld 14.4 11.05 2.3% 13.6 10.00 3.7% 14.2 14.95 4.2% 9.7 14.38 7.2% 14.1 15.10 2.S% 15.9 12.28 5.9% 11.1 12.99 5.3% 7.7 10.15 2.7% 11.7 14.55 8.1% 8.7 9.86 0.2% 11.1 12.04 0.3% 14.3 11.44 3.9% 8.3 6.93 5.8% 11.0 12.71 2.3% 6.1 8.86 1.6% 1o.6 7.38 5.1% 33.7% 14.8 11.56 1.6% 21.6 15.81 1.3% 14.9 13.58 3.8% 12.2 9.69 1.8% 15.7 15.00 3.2% 6.6 8.23 5.7% 16.1 16.o1 1.9% 35.8"/ 16.7 13.8o 3.2% 16.9 12.03 3.2% International Source: MSCI, Bloomberg. Returns are in USD. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of Graystone in any trading strategy. Please refer to important information, disclosures and qualifications at the end ofthis material. Consultin '"' PagdNjF�TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW �j WEALTH MANAGEMENT Morgan Stanley Global Valuations MSCI USA Forward P/E and Relative Valuation As of October 1, 2020 28 24 20 Y�% .1 16 12 8 2001 2004 2007 2010 2013 2o16 2019 Forward P/E Ratio (left axis) Vs. MSCI ACWI (right axis) MSCI Japan Forward P/E and Relative Valuation As of October 1, 2020 40 30 20 10 1.2 1.1 1.0 0.9 o.8 0.7 o.6 2.5 2.0 1.5 1.0 0 0.5 2001 2004 2007 2010 2013 2o16 2019 Forward P/E Ratio (left axis) Vs. MSCI ACWI (right axis) International MSCI Europe Forward P/E and Relative Valuation As of October 1, 2020 25 20 �5 Y� _. i 10 5 2001 2004 2007 2010 Forward P/E Ratio (left axis) 1.1 1.0 0.9 o.8 0.7 o.6 0.5 2013 2o16 2019 Vs. MSCI ACWI (right axis) MSCI EM Forward P/E and Relative Valuation As of October 1, 2020 17 15 13 11 9 7 5 1.2 f 1.0 o.8 o.6 0.4 0.2 0.0 2001 2004 2007 2010 2013 2o16 2019 Forward P/E Ratio (left axis) Vs. MSCI ACWI (right axis) Source: FactSet, Morgan Stanley Wealth Management GIC. (i) Forward P/E = market price per share / expected earnings per share. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. pagd1j,8TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW Graystone Consulting'" WEALTH MANAGEMENT Global Sovereign Rates io-Year Sovereign Bond Yields As Of JUIy 2, 2020 14% 12% 10% 8% 6% 4% 2% o% -2% 1988 1991 1994 Morgan Stantey International UK Germany Japan US I -0.53% 1997 2000 2003 2oo6 2009 2012 2015 2oi8 Source: FactSet, Morgan Stanley Wealth Management GIC Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Pagdv1,9TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW Graystone Consulting'" WEALTH MANAGEMENT Morgan Stanley Alternative Strategy Performance As of August 31, 2020 (one -month delay) Performance as of August31, 2020 Quarter to Date and Trailinq 12-Month Total Return Index in USD ■QTD T12M Equity Hedge Multi -Strategy 9.1% 2.8% Hedge Total 7.Equity ° 82% 4.1 % Event Driven 0.1% Relative Value ■ 3.0% 0.1% Relative Value -- Fixed Income M 3.5% 0.5% Global Emerging Funds = 4.8%1 3% FTSE EPRA/NAREIT Global 7.9% -15.7% Alerian MLP 629% -39.8% Bloomberg Commodity -4.8% ■ 2.7% Macro Total ■ 3.1% 0.1% Alternatives Source: Bloomberg, HFR, NCREIF. All hedged strategies represented by corresponding HFRI index. Hedged strategies consist of hedge funds and managed futures. For more information about the risks to Master Limited Partnerships (MLPs) please see the Risk Considerations section atthe end of this material. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Graystone PagdV20TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW Consulting'" WEALTH MANAGEMENT Morgan Stanley Alternatives Performance Summary YTD Total Return' As of October 1, 2020 10% 4.6% 4.1% ° 1.6 /o 0.0% 0% -10% -20% -30% -40% -50% -3.0% -6.5% -12.4% -50.5% x?�'e,y r0� QJ�J fat C.° C� P �Q Alternatives 5-Year Risk and Return' - As of October 1, 2020 5% HFRX Equity HFRX Macro/CTA Relative Long/Short Value♦\ Global REITS *HFRX Event O% Driven ;r HFRX Equity -5% Market ♦ Commodities Neutral ra 0 -10% } HFRX Global u, Hedge Fund -15% -20% Alerian MLPs -25% o% 4% 8% 12% 16% 20% 24% 28% 32% 36% 40% 5-Yr Volatility Source: Bloomberg, Morgan Stanley Wealth Management GIC. (i) Indices for Global REITs, Managed Futures and Commodities are FTSE EPRA/NAREIT Global Index, HFRX Macro/CTA Index, and Bloomberg Commodity Index, respectively. Standard deviation (volatility) is a measure of the dispersion of a set of data from its mean. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of in anytrading strategy. Please referto important information, disclosures and qualifications atthe end ofthis material. Graystone Page Z TTH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW ConsuhingsM WEALTH MANAGEMENT Morgan Stantey Alternative Strategy Definitions Convertible Arbitrage is a market -neutral investment strategy often employed by hedge funds. It typically involves taking a long strategy in a convertible arbitrage and a short position in the underlying common stock, in orderto capitalize on pricing inefficiencies between the convertible and the stock. Credit Long/Short This strategy consists of a core holding of long credits hedged at all times with varying degrees of short sales of bonds and/or index options. Some managers maintain a substantial portion of assets within a hedge structure and commonly employ leverage. Distressed Credit involves directly working with a company that has filed for bankruptcy or has a significant chance of filing for bankruptcy in the near future to extend it credit on behalf of the hedge fund. This credit can be in the form of bonds or even a revolving credit line. The distressed firm usually needs a lot of cash to turn things around; if more than one hedge fund extends credit, then none of the funds are overexposed to the default risk tied to one investment. This is why multiple hedge funds and investment banks usually undertake the endeavor together. Equity Long/Short This strategy consists of a core holding of long equities hedged at all times with varying degrees of short sales of stock and/or index options. Some managers maintain a substantial portion of assets within a hedge structure and commonly employ leverage. Equity Market Neutral Equity market neutral strategies employ sophisticated quantitative techniques of analyzing price data to ascertain information about future price movement and relationships between securities, select securities for purchase and sale. These can include both factor -based and statistical arbitrage/trading strategies. Factor -based investment strategies include strategies in which the investment thesis is predicated on the systematic analysis of common relationships between securities. In many but not all cases, portfolios are constructed to be neutral to one or multiple variables, such as broader equity markets in dollar or beta terms, and leverage is frequently employed to enhance the return profile of the positions identified. Statistical arbitrage/trading strategies consist of strategies in which the investment thesis is predicated on exploiting pricing anomalies which may occur as a function of expected mean reversion inherent in security prices; high frequency techniques may be employed and trading strategies may also be employed on the basis of technical analysis or opportunistically to exploit new information the investment manager believes has not been fully, completely or accurately discounted into current security prices. Equity market neutral strategies typically maintain characteristic net equity market exposure no greater than lo% long or short. Event Driven Investment managers in this strategy maintain positions in companies currently or prospectively involved in corporate transactions of a wide variety including but not limited to mergers, restructurings, financial distress, tender offers, shareholder buybacks, debt exchanges, security issuance or other capital structure adjustments. Security types can range from most senior in the capital structure to most junior or subordinated, and frequently involve additional derivative securities. Event -driven exposure includes a combination of sensitivities to equity markets, credit markets and idiosyncratic, company -specific developments. Investment theses are typically predicated on fundamental characteristics (as opposed to quantitative), with the realization of the thesis predicated on a specific development exogenous to the existing capital structure. Global Macro This is a hedge fund strategy that bases its holdings —such as long and short positions in various equity, fixed income, currency, and futures markets —primarily on overall economic and political views of various countries (macroeconomic principles). Hedge Fund of Funds This strategy tracks investment managers who trade a broad range of strategies in which the investment process is predicated on movements in underlying economic variables and the impact these have on equity, fixed income, hard currency and commodity markets. Managers employ a variety of techniques, both discretionary and systematic analysis, combinations of top down and bottom up theses, quantitative and fundamental approaches and long and short term holding periods. Although some strategies employ relative value techniques, macro strategies are distinct from relative value strategies in that the primary investment thesis is predicated on predicted or future movements in the underlying instruments, rather than realization of a valuation discrepancy between securities. In a similar way, while both macro and equity hedge managers may hold equity securities, the overriding investment thesis is predicated on the impact movements in underlying macroeconomic variables may have on security prices, as opposed to equity hedge, in which the fundamental characteristics of the company are the most integral to the investment thesis. Managed Futures Funds These funds primarily trade liquid global futures, options, swaps, and foreign exchange contracts, both listed and over-the-counter. A majority of these funds follow trend -following, price -momentum strategies. Other strategies included in this category are systematic mean reversion, discretionary global macro strategies, commodity index tracking, and other futures strategies. More than 6o% of the fund's exposure is invested through derivative securities. These funds obtain exposure primarily through derivatives; the holdings are largely cash instruments. Relative Value Investment managers in this strategy maintain positions in which the investment thesis is predicated on realization of a valuation discrepancy in the relationship between multiple securities. They employ a variety of fundamental and quantitative techniques to establish investment theses, and security types range broadly across equity, fixed income, derivatives or other security types. Past performance is no guarantee of future results. Estimates of future performance are based on assumptions that may not be realized. This material is not a solicitation of any offer to buy or sell any security or of Graystone in any trading strategy. Please refer to important information, disclosures and qualifications at the end of this material. Consultin '"' PagdN�.TH MANAGEMENT INVESTMENT RESOURCES I CHARTBOOK I QUARTER IN REVIEW �j WEALTH MANAGEMENT Morgan Stanley Morgan Stanley Wealth Management is the trade name of Morgan Stanley Smith Barney LLC, a registered broker -dealer in the United States. The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be appropriate for all clients. Any product discussed herein may be purchased only after a client has carefully reviewed the offering memorandum and executed the subscription documents. Morgan Stanley Wealth Management has not considered the actual or desired investment objectives, goals, strategies, guidelines, or factual circumstances of any investor in any fund(s). Before making any investment, each investor should carefully considerthe risks associated with the investment, as discussed in the applicable offering memorandum, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. Morgan Stanley Smith Barney LLC offers investment program services through a variety of investment programs, which are opened pursuant to written client agreements. Each program offers investment managers, funds and features that are not available in other programs; conversely, some investment managers, funds or investment strategies may be available in more than one program. Morgan Stanley's investment advisory programs may require a minimum asset level and, depending on your specific investment objectives and financial position, may not be appropriate for you. Please see the Morgan Stanley Smith Barney LLC program disclosure brochure (the "Morgan Stanley ADV") for more information in the investment advisory programs available. The Morgan Stanley ADV is available at www.moraanstanlev.com/ADV. Sources of Data. Information in this material in this report has been obtained from sources that we believe to be reliable, but we do not guarantee its accuracy, completeness ortimeliness. Third -party data providers make no warranties or representations relating to the accuracy, completeness ortimeliness of the data they provide and are not liable for any damages relating to this data. All opinions included in this material constitute the Firm'sjudgment as of the date of this material and are subject to change without notice . This material was not prepared by the research departments of Morgan Stanley & Co. LLC or Morgan Stanley Smith Barney LLC. Some historical figures may be revised due to newly identified programs, firm restatements, etc. Global Investment Manager Analysis (GIMA) Focus List, Approved List and Tactical Opportunities List; Watch Policy. GIMA uses two methods to evaluate investment products in applicable advisory programs: Focus (and investment products meeting this standard are described as being on the Focus List) and Approved (and investment products meeting this standard are described as being on the Approved List). In general, Focus entails a more thorough evaluation of an investment product than Approved. Sometimes an investment product may be evaluated using the Focus List process but then placed on the Approved List instead of the Focus List. Investment products may move from the Focus List to the Approved List, or vice versa. GIMA may also determine that an investment product no longer meets the criteria under either process and will no longer be recommended in investment advisory programs (in which case the investment product is given a "Not Approved" status). GIMA has a `Watch" policy and may describe a Focus List orApproved List investment product as being on "Watch" if GIMA identifies specific areas that (a) merit further evaluation by GIMA and (b) may, but are not certain to, result in the investment product becoming "Not Approved."The Watch period depends on the length of time needed for GIMA to conduct its evaluation and for the investment manager orfund to address any concerns. Certain investment products on either the Focus List orApproved List may also be recommended forthe Tactical Opportunities List based in part on tactical opportunities existing at a given time. The investment products on the Tactical Opportunities List change overtime. For more information on the Focus List, Approved List, Tactical Opportunities List and Watch processes, please see the applicable Form ADV Disclosure Document for Morgan Stanley Wealth Management. Your Financial Advisor or Private Wealth Advisor can also provide upon request a copy of a publication entitled "Manager Selection Process." The Global Investment Committee is a group of seasoned investment professionals who meet regularly to discuss the global economy and markets. The committee determines the investment outlook that guides our advice to clients. They continually monitor developing economic and market conditions, reviewtactical outlooks and recommend model portfolio weightings, as well as produce a suite of strategy, analysis, commentary, portfolio positioning suggestions and other reports and broadcasts. The GIC Asset Allocation Models are not available to be directly implemented as part of an investment advisory service and should not be regarded as a recommendation of any Morgan Stanley investment advisory service. The GIC Asset Allocation Models do not represent actual trading or any type of account or any type of investment strategies and none of the fees or other expenses (e .g. commissions, mark-ups, mark-downs, advisory fees, fund expenses) associated with actual trading or accounts are reflected in the GIC Asset Allocation Models which, when compounded over a period of years, would decrease returns. Adverse Active AlphaSM 2.0 is a patented screening and scoring process designed to help identify high -quality equity and fixed income managers with characteristics that may lead to future outperformance relative to index and peers. While highly ranked managers performed well as a group in our Adverse Active Alpha model back tests, not all of the managers will outperform. Please note that this data may be derived from back -testing, which has the benefit of hindsight. In addition, highly ranked managers can have differing risk profiles that might not be appropriate for all investors. Our view is that Adverse Active Alpha is a good starting point and should be used in conjunction with other information. Morgan Stanley Wealth Management's qualitative and quantitative investment manager due diligence process are equally important factors for investors when considering managers for use through an investment advisory program. Factors including, but not limited to, manager turnover and changes to investment process can partially orfully negate a positive Adverse Active Alpha ranking. Additionally, highly ranked managers can have differing risk Drofiles that miaht not be Graystone DISCLOSURES Consulting'" Page 23 WEALTH MANAGEMENT Morgan Stanley appropriate for all investors. The proprietary Value Score methodology considers an active investment strategies'value proposition relative to its costs. From a historical quantitative study of several quantitative markers, Value Score measures perceived forward -looking benefit and computes (i) "fair value" expense ratios for most traditional investment managers across 40 categories and (2) managers' perceived "excess value" by comparing the fair value expense ratios to actual expense ratios. Managers are then ranked within each category by their excess value to assign a Value Score. Our analysis suggests that greater levels of excess value have historically corresponded to attractive subsequent performance. For more information on the ranking models, please see Adverse Active AlphaSM 2.0: Scoring Active Managers According to Potential Alpha and Value Score: Scoring Fee Efficiency by Comparing Managers' "Fair Value" and Actual Expense Ratios. The whitepapers are available from your Financial Advisor or Private Wealth Advisor. ADVERSE ACTIVE ALPHA is a registered service mark of Morgan Stanley and/or its affiliates. U.S. Pat. No. 8,756,o98 applies to the Adverse Active Alpha system and/or methodology. Additionally, highly ranked managers can have differing risk profiles that might not be appropriate for all investors. For more information on AAA, please see the Adverse Active Alpha Ranking Model and Selecting Managers with Adverse Active Alpha whitepapers. The whitepaper are available from your Financial Advisor or Private Wealth Advisor. ADVERSE ACTIVE ALPHA is a registered service mark of Morgan Stanley and/or its affiliates. U.S. Pat. No. 8,756,o98 applies to the Adverse Active Alpha system and/or methodology. The Global Investment Manager Analysis (GIMA) Services Only Apply to Certain Investment Advisory Programs GIMA evaluates certain investment products forthe purposes of some — but not all — of Morgan Stanley Smith Barney LLC's investment advisory programs (as described in more detail in the applicable Form ADV Disclosure Document for Morgan Stanley Wealth Management). If you do not invest through one of these investment advisory programs, Morgan Stanley Wealth Management is not obligated to provide you notice of any GIMA Status changes even though it may give notice to clients in other programs. Strategy May Be Available as a Separately Managed Account or Mutual Fund Strategies are sometimes available in Morgan Stanley Wealth Management investment advisory programs both in the form of a separately managed account ("SMA") and a mutual fund. These may have different expenses and investment minimums. Your Financial Advisor or Private Wealth Advisor can provide more information on whether any particular strategy is available in more than one form in a particular investment advisory program. In most Morgan Stanley Wealth Management investment advisory accounts, fees are deducted quarterly and have a compounding effect on performance. For example, on an advisory account with a 3%annual fee, if the gross annual performance is 6.00%, the compounding effect of the fees will result in a net performance of approximately 3.93%after one year, i afterthree years, and 21.23% afterfive years. Conflicts of Interest: GIMA's goal is to provide professional, objective evaluations in support of the Morgan Stanley Wealth Management investment advisory programs. We have policies and procedures to help us meet this goal. However, our business is subject to various conflicts of interest. For example, ideas and suggestions for which investment products should be evaluated by GIMA come from a variety of sources, including our Morgan Stanley Wealth Management Financial Advisors and their direct or indirect managers, and other business persons within Morgan Stanley Wealth Management or its affiliates. Such persons may have an ongoing business relationship with certain investment managers or mutual fund companies whereby they, Morgan Stanley Wealth Management or its affiliates receive compensation from, or otherwise related to, those investment managers or mutual funds. For example, a Financial Advisor may suggest that GIMA evaluates an investment manager or fund in which a portion of his or her clients' assets are already invested. While such a recommendation is permissible, GIMA is responsible forthe opinions expressed by GIMA. See the conflicts of interest section in the applicable Form ADV Disclosure Document for Morgan Stanley Wealth Management for a discussion of other types of conflicts that may be relevant to GIMA's evaluation of managers and funds. In addition, Morgan Stanley Wealth Management, MS & Co., managers and their affiliates provide a variety of services (including research, brokerage, asset management, trading, lending and investment banking services) for each other and for various clients, including issuers of securities that may be recommended for purchase or sale by clients or are otherwise held in client accounts , and managers in various advisory programs. Morgan Stanley Wealth Management, managers, MS & Co., and their affiliates receive compensation and fees in connection with these services. Morgan Stanley Wealth Management believes that the nature and range of clients to which such services are rendered is such that it would be inadvisable to exclude categorically all of these companies from an account . Morgan Stanley charges each fund family we offer a mutual fund support fee, also called a "revenue -sharing payment," on client account holdings in fund families according to a tiered rate that increases along with the management fee of the fund so that lower management fee funds pay lower rates than those with higher management fees. Overlay Managers or Executing Sub -Managers ("managers") in some of Morgan Stanley's Separately Managed Account ("SMA") programs may affect transactions through broker -dealers otherthan Morgan Stanley or our affiliates. If your manager trades with another firm, you maybe assessed costs by the other firm in addition to Morgan Stanley's fees. Those costs will be included in the net price of the security, not separately reported on trade confirmations or account statements. Certain managers have historically directed most, if not all, of theirtrades to outside firms. Information provided by managers concerning trade execution away from Morgan Stanley is summarized at: www.moraanstanlev.com/wealth/investmentsolutions/odfs/adv/sotresDonse.odf. For more information on trading and costs, please refer to the ADV Brochure for your program(s), available at www.mora_anstanlev.com/ADV, or contact your Financial Advisor/Private Wealth Advisor. Graystone DISCLOSURES Consulting'" Page 24 WEALTH MANAGEMENT Morgan Stanley ConsiderYour Own Investment Needs: The model portfolios and strategies discussed in the material are formulated based on general client characteristics including risk tolerance. This material is not intended to bean analysis of whether particular investments or strategies are appropriate for you or a recommendation, or an offer to participate in any investment. Therefore, clients should not use this profile as the sole basis for investment decisions. They should consider all relevant information, including their existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. Such a determination may lead to asset allocation results that are materially different from the asset allocation shown in this profile. Talk to your Financial Advisor about what would be an appropriate asset allocation for you, whether CGCM is an appropriate program for you. No obligation to notify— Morgan Stanley Wealth Management has no obligation to notify you when the model portfolios, strategies, or any other information, in this material changes. Please considerthe investment objectives, risks, fees, and charges and expenses of mutual funds, ETFs, closed end funds, unit investment trusts, and variable insurance products carefully before investing. The prospectus contains this and other information about each fund. To obtain a prospectus, contact your Financial Advisor or Private Wealth Advisor or visit the Morgan Stanley website at www.moroanstaniev.com. Please read it carefully before investing. An investment in a money market fund is not insured orguaranteed by the Federal Deposit Insurance Corporation or any othergovernment agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The type of mutual funds and ETFs discussed in this presentation utilizes nontraditional or complex investment strategies and/or derivatives. Examples of these types of funds include those that utilize one or more of the below noted investment strategies or categories or which seek exposure to the following markets: (i) commodities (e.g., agricultural, energy and metals), currency, precious metals; (z) managed futures; (3) leveraged, inverse or inverse leveraged; (4) bear market, hedging, long -short equity, market neutral; (5) real estate; (6) volatility (seeking exposure to the CBOE VIX Index). Investors should keep in mind that while mutual funds and ETFs may, at times, utilize nontraditional investment options and strategies, they should not be equated with unregistered privately offered alternative investments. Because of regulatory limitations, mutual funds and ETFs that seek alternative -like investment exposure must utilize a more limited investment universe. As a result, investment returns and portfolio characteristics of alternative mutual funds and ETFs may vary from traditional hedge funds pursuing similar investment objectives. Moreover, traditional hedge funds have limited liquidity with long "lock -up" periods allowing them to pursue investment strategies without having to factor in the need to meet client redemptions and ETFs trade on an exchange . On the other hand, mutual funds typically must meet daily client redemptions. This differing liquidity profile can have a material impact on the investment returns generated by a mutual fund or ETF pursuing an alternative investing strategy compared with a traditional hedge fund pursuing the same strategy. Nontraditional investment options and strategies are often employed by a portfolio managerto further a fund's investment objective and to help offset market risks. However, these features may be complex, making it more difficult to understand the fund's essential characteristics and risks, and how it will perform in different market environments and over various periods of time. They may also expose the fund to increased volatility and unanticipated risks particularly when used in complex combinations and/or accompanied by the use of borrowing or "leverage." The Morgan Stanley Mobile App is currently available for iPhone® and iPad® from the App Store® and Android"' on Google Play"'. Standard messaging and data rates from your provider may apply. Subject to device connectivity. Apple@, the Apple logo, iPhone®, iPad@, and iPad Air@ are trademarks of Apple Inc., registered in the US and other countries. Apple Pay"' and iPad min iTm are trademarks of Apple Inc. App Store is a service mark of Apple Inc. Android and Google Play are trademarks of Google Inc. 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Morgan Stanley does not verify that the information is accurate and makes no representation or warranty as to its accuracy, timeliness, or completeness. Additional information about the features and services offered through Total Wealth View are available on the Total Wealth View site on Morgan Stanley Online and also in the Total Wealth View Terms and Conditions of Use. Graystone DISCLOSURES Consulting'" Page 25 WEALTH MANAGEMENT Morgan Stanley Mobile check deposits are subject to certain terms and conditions. Checks must be drawn on a U.S. Bank. Send Money with Zelle@ is available on the Morgan Stanley Mobile App for iPhone and Android and on Morgan Stanley Online. Enrollment is required and dollar and frequency limits may apply. Domestic fund transfers must be made from an eligible account at Morgan Stanley Smith Barney LLC (Morgan Stanley) to a US -based account at another financial institution. Morgan Stanley maintains arrangements with JP Morgan Chase Bank, N.A. and UMB Bank, N.A. as NACHA-participating depository financial institutions for the processing of transfers on Zelle@. Data connection required, and message and data rates may apply, including those from your communications service provider. Must have an eligible account in the U.S. to use Zelle®. Transactions typically occur in minutes when the recipient's email address or U.S. mobile number is already enrolled with Zelle. See the Morgan Stanley Send Money with Zelle® terms for details. Zelle and the Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license. Morgan Stanley is not affiliated with Zelle®. Electronic payments arrive to the payee within 1-2 business days, check payments arrive to the payee within 5 business days. Same -day and overnight payments are available for an additional fee within the available payment timeframes. KEY ASSET CLASS CONSIDERATIONS AND OTHER RISKS Investing in the markets entails the risk of market volatility. The value of all types of investments, including stocks, mutual funds, exchange -traded funds ("ETFs"), closed -end funds, and unit investment trusts, may increase or decrease over varying time periods. To the extent the investments depicted herein represent international securities, you should be aware that there may be additional risks associated with international investing, including foreign economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes, and differences in financial and accounting standards. These risks may be magnified in emerging markets and frontier markets. Small- and mid -capitalization companies may lack the financial resources, product diversification and competitive strengths of larger companies. In addition, the securities of small- and mid -capitalization companies may not trade as readily as, and be subject to higher volatility than, those of larger, more established companies. The value of fixed income securities will fluctuate and, upon a sale, may be worth more or less than their original cost or maturity value. Bonds are subject to interest rate risk, call risk, reinvestment risk, liquidity risk, and credit risk of the issuer. High yield bonds are subject to additional risks such as increased risk of default and greater volatility because of the lower credit quality of the issues. In the case of municipal bonds, income is generally exempt from federal income taxes. Some income may be subject to state and local taxes and to the federal alternative minimum tax. Capital gains, if any, are subject to tax. Treasury Inflation Protection Securities' (TIPS) coupon payments and underlying principal are automatically increased to compensate for inflation by tracking the consumer price index (CPI). While the real rate of return is guaranteed, TIPS tend to offer a low return. Because the return of TIPS is linked to inflation, TIPS may significantly underperform versus conventional U.S. Treasuries in times of low inflation. There is no guarantee that investors will receive par ifTIPS are sold priorto maturity. The returns on a portfolio consisting primarily of environmental, social, and governance -aware investments ("ESG") may be lower or higherthan a portfolio that is more diversified or where decisions are based solely on investment considerations. Because ESG criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria. The companies identified and investment examples are for illustrative purposes only and should not be deemed a recommendation to purchase, hold or sell any securities or investment products. They are intended to demonstrate the approaches taken by managers who focus on ESG criteria in their investment strategy. There can be no guarantee that a client's account will be managed as described herein. Options and margin trading involve substantial risk and are not appropriate for all investors. Besides the general investment risk of holding securities that may decline in value and the possible loss of principal invested, closed -end funds may have additional risks related to declining market prices relative to net asset values (NAVs), active manager underperformance and potential leverage. Closed -end funds, unlike open-end funds, are not continuously offered. There is a one-time public offering and once issued, shares of closed -end funds are sold in the open market through a stock exchange. NAV is total assets less total liabilities divided by the number of shares outstanding. At the time an investor purchases shares of a closed -end fund, shares may have a market price that is above or below NAV. Portfolios that invest a large percentage of assets in only one industry sector (or in only a few sectors) are more vulnerable to price fluctuation than those that diversify among a broad range of sectors. Alternative investments often are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are appropriate only for eligible, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period of time. They may be highly illiquid and can engage in leverage and other speculative practices that may increase the volatility and risk of loss. Alternative Investments typically have higher fees than traditional investments. Investors should carefully review and consider potential risks before investing. Certain of these risks may include but are not limited to: Loss of all or a substantial portion of the investment due to leveraging, short -selling, or other speculative practices; Lack of liquidity in that there may be no secondary market for a fund; Volatility of returns; Restrictions on transferring interests in a fund; Potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized; Absence of information regarding valuations and pricing; Complex tax structures and delays in tax reporting; Less regulation and higher fees than mutual funds, Risks associated with the operations, personnel, and processes of the manager, and Risks associated with cybersecurity. As a diversified global financial services firm, Morgan Stanley Wealth Management engages in a broad spectrum of activities including financial advisory services, investment management activities, sponsoring and manaaina Drivate investment Graystone DISCLOSURES Consulting'" Page 26 WEALTH MANAGEMENT Morgan Stanley funds, engaging in broker -dealer transactions and principal securities, commodities and foreign exchange transactions, research publication, and other activities. In the ordinary course of its business, Morgan Stanley Wealth Management therefore engages in activities where Morgan Stanley Wealth Management's interests may conflict with the interests of its clients, including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund. All expressions of opinion are subject to change without notice and are not intended to be a forecast of future events or results. Further, opinions expressed herein may differ from the opinions expressed by Morgan Stanley Wealth Management and/or other businesses/affiliates of Morgan Stanley Wealth Management. This is not a "research report" as defined by FINRA Rule 2241 or a "debt research report' as defined by FINRA Rule 2242 and was not prepared bythe Research Departments of Morgan Stanley Smith Barney LLC or Morgan Stanley & Co. LLC or its affiliates. Certain information contained herein may constitute forward -looking statements. Due to various risks and uncertainties, actual events, results or the performance of a fund may differ materially from those reflected or contemplated in such forward -looking statements. Clients should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. While the HFRI indices are frequently used, they have limitations (some of which are typical of other widely used indices). These limitations include survivorship bias (the returns of the indices may not be representative of all the hedge funds in the universe because of the tendency of lower performing funds to leave the index); heterogeneity (not all hedge funds are alike or comparable to one another, and the index may not accurately reflect the performance of a described style); and limited data (many hedge funds do not report to indices, and the index may omit funds, the inclusion of which might significantly affect the performance shown. The HFRI indices are based on information self -reported by hedge fund managers that decide on their own, at any time, whether or not they want to provide, or continue to provide, information to HFR Asset Management, L.L.C. Results forfunds that go out of business are included in the index until the date that they cease operations. Therefore, these indices may not be complete or accurate representations of the hedge fund universe, and may be biased in several ways. Composite index results are shown for illustrative purposes and do not represent the performance of a specific investment. Individual funds have specific tax risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley Wealth Management does not provide tax or legal advice. Interests in alternative investment products are offered pursuant to the terms of the applicable offering memorandum , are distributed by Morgan Stanley Wealth Management and certain of its affiliates, and (i) are not FDIC -insured, (2) are not deposits or other obligations of Morgan Stanley Wealth Management or any of its affiliates, (3) are not guaranteed by Morgan Stanley Wealth Management and its affiliates, and (4) involve investment risks, including possible loss of principal. Morgan Stanley Wealth Management is a registered broker -dealer, not a bank. This material is not to be reproduced or distributed to any other persons (otherthan professional advisors of the investors or prospective investors , as applicable, receiving this material) and is intended solely for the use of the persons to whom it has been delivered. This material is not for distribution to the general public. Past performance is no guarantee of future results. Actual results may vary. SIPC insurance does not apply to precious metals, other commodities, ortraditional alternative investments. In Consulting Group's advisory programs, alternative investments are limited to US -registered mutual funds, separate account strategies and exchange -traded funds (ETFs) that seek to pursue alternative investment strategies or returns utilizing publicly traded securities. Investment products in this category may employ various investment strategies and techniques for both hedging and more speculative purposes such as short -selling, leverage, derivatives and options, which can increase volatility and the risk of investment loss. Alternative investments are not appropriate for all investors. As a diversified global financial services firm, Morgan Stanley Wealth Management engages in a broad spectrum of activities including financial advisory services, investment management activities, sponsoring and managing private investment funds, engaging in broker -dealer transactions and principal securities, commodities and foreign exchange transactions, research publication, and other activities. In the ordinary course of its business, Morgan Stanley Wealth Management therefore engages in activities where Morgan Stanley Wealth Management's interests may conflict with the interests of its clients , including the private investment funds it manages. Morgan Stanley Wealth Management can give no assurance that conflicts of interest will be resolved in favor of its clients or any such fund. Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributing important tax information. Individual funds have specific risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Morgan Stanley Wealth Management does not provide tax or legal advice. A majority of Alternative Investment managers reviewed and selected by GIMA pay or cause to be paid an ongoing fee for distribution from their management fees to Morgan Stanley Wealth Management in connection with Morgan Stanley Wealth Management clients that purchase an interest in an Alternative Investment and in some instances pay these fees on the investments held by advisory clients. Morgan Stanley Wealth Management rebates such fees that are received and attributable to an investment held by an advisory client and retains the fees paid in connection with investments held by brokerage clients. Morgan Stanley Wealth Management has a conflict of interest in offering alternative investments because Morgan Stanley Wealth Management or our affiliates, in most instances, earn more money in your account from your investments in alternative investments than from other investment options. It should be noted that the majority of hedge fund indexes are comprised of hedge fund manager returns. This is in contrast to traditional indexes, which are comprised of individual securities in the various market segments they represent and offer complete transparency as to membership and construction methodology. As such, some believe that hedge fund index returns have certain biases that are not present in traditional indexes. Some of these biases inflate index performance, while others may skew performance negatively. However, many studies indicate that overall hedge fund index performance has been biased to the upside. Some studies suggest performance has been inflated by up to 26o basis points or more annually depending on the types of biases included and the time period studied. Although there are numerous potential biases that could affect hedge fund returns, we identify some of the more common ones throughout this paper. Self-selection bias results when certain manager returns are not included in the index returns and may result in performance being skewed up or down . Because hedge funds are private placements, hedge fund managers are able to decide which fund returns they want to report and are able to opt out of reporting to the various databases. Certain hedge fund manaaers may choose only to report Graystone DISCLOSURES Consulting'" Page 27 WEALTH MANAGEMENT Morgan Stanley returns for funds with strong returns and opt out of reporting returns for weak performers. Other hedge funds that close may decide to stop reporting in order to retain secrecy, which may cause a downward bias in returns. Survivorship bias results when certain constituents are removed from an index. This often results from the closure of funds due to poor performance, "blow ups," or other such events. As such, this bias typically results in performance being skewed higher. As noted, hedge fund index performance biases can result in positive or negative skew. However, it would appear that the skew is more often positive. While it is difficult to quantify the effects precisely, investors should be aware that idiosyncratic factors may be giving hedge fund index returns an artificial "lift" or upwards bias. Hedge Funds of Funds and many funds of funds are private investment vehicles restricted to certain qualified private and institutional investors. They are often speculative and include a high degree of risk. Investors can lose all or a substantial amount of their investment. They may be highly illiquid, can engage in leverage and other speculative practices that may increase volatility and the risk of loss, and may be subject to large investment minimums and initial lockups. They involve complex tax structures, tax -inefficient investing and delays in distributing important tax information. Categorically, hedge funds and funds of funds have higher fees and expenses than traditional investments, and such fees and expenses can lower the returns achieved by investors. Funds of funds have an additional layer of fees over and above hedge fund fees that will offset returns. An investment in an exchange -traded fund involves risks similar to those of investing in a broadly based portfolio of equity securities traded on an exchange in the relevant securities market, such as market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends in stock and bond prices. An investment in a target date portfolio is subject to the risks attendant to the underlying funds in which it invests, in these portfolios the funds are the Consulting Group Capital Market funds. A target date portfolio is geared to investors who will retire and/or require income at an approximate year. The portfolio is managed to meet the investor's goals by the pre -established year or "target date." A target date portfolio will transition its invested assets from a more aggressive portfolio to a more conservative portfolio as the target date draws closer. An investment in the target date portfolio is not guaranteed at any time, including, before or after the target date is reached. Managed futures investments are speculative, involve a high degree of risk, use significant leverage, are generally illiquid, have substantial charges, subject investors to conflicts of interest, and are appropriate only for the risk capital portion of an investor's portfolio. Managed futures investments do not replace equities or bonds but rather may act as a complement in a well diversified portfolio. Managed Futures are complex and not appropriate for all investors. Rebalancing does not protect against a loss in declining financial markets. There may be a potential tax implication with a rebalancing strategy. Asset allocation and diversification do not assure a profit or protect against loss in declining financial markets. Past performance is no guarantee of future results. Actual results may vary. Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC ("Morgan Stanley"), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice and are not "fiduciaries" (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Morgan Stanley and/or as described at www.moraanstaniev.com/disclosures/dol. Individuals are encouraged to consult theirtax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account. Annuities and insurance products are offered in conjunction with Morgan Stanley Smith Barney LLC's licensed insurance agency affiliates. Indices are unmanaged and investors cannot directly invest in them. They are not subject to expenses or fees and are often comprised of securities and other investment instruments the liquidity of which is not restricted. A particular investment product may consist of securities significantly different than those in any index referred to herein. Composite index results are shown for illustrative purposes only, generally do not represent the performance of a specific investment, may not, for a variety of reasons, be an appropriate comparison or benchmark for a particular investment and may not necessarily reflect the actual investment strategy or objective of a particular investment. Consequently, comparing an investment to a particular index may be of limited use. This material is not a financial plan and does not create an investment advisory relationship between you and your Morgan Stanley Financial Advisor. We are not your fiduciary either underthe Employee Retirement Income Security Act of 1974 (ERISA) or the Internal Revenue Code of i986, and any information in this report is not intended to form the primary basis for any investment decision by you, or an investment advice or recommendation for either ERISA or Internal Revenue Code purposes. Morgan Stanley Private Wealth Management will only prepare a financial plan at your specific request using Private Wealth Management approved financial planning signature. We may act in the capacity of a broker or that of an advisor. As your broker, we are not your fiduciary and our interests may not always be identical to yours. Please consult with your Private Wealth Advisor to discuss our obligations to disclose to you any conflicts we may from time to time have and our duty to act in your best interest. We may be paid both by you and by others who compensate us based on what you buy. Our compensation, including that of your Private Wealth Advisor, may vary by product and over time. Investment and services offered through Morgan Stanley Private Wealth Management, a division of Morgan Stanley Smith Barney LLC, Member SIPC. Graystone DISCLOSURES Consulting'" Page 28 WEALTH MANAGEMENT Morgan Stanley For index, indicator and survey definitions referenced in this report please visit the following: httns://www.moraanstanlev.com/wealth-investmentsolutions/wmir-definitions GLOBAL INVESTMENT COMMITTEE (GIC) ASSET ALLOCATION MODELS: The Asset Allocation Models are created by Morgan Stanley Wealth Management's GIC. HYPOTHETICAL MODEL PERFORMANCE (GROSS): Hypothetical model performance results do not reflect the investment or performance of an actual portfolio following a GIC Strategy, but simply reflect actual historical performance of selected indices on a real-time basis over the specified period of time representing the GIC's strategic and tactical allocations as of the date ofthis report. The past performance shown here is simulated performance based on benchmark indices, not investment results from an actual portfolio or actual trading. There can be large differences between hypothetical and actual performance results achieved by a particular asset allocation or trading strategy. Hypothetical performance results do not represent actual trading and are generally designed with the benefit of hindsight. Actual performance results of accounts vary due to, for example, market factors (such as liquidity) and client -specific factors (such as investment vehicle selection, timing of contributions and withdrawals, restrictions and rebalancing schedules). Clients would not necessarily have obtained the performance results shown here if they had invested in accordance with any GIC Asset Allocation Model forthe periods indicated. Despite the limitations of hypothetical performance, these hypothetical performance results allow clients and Financial Advisors to obtain a sense of the risk/return trade-off of different asset allocation constructs. The hypothetical performance results in this report are calculated using the returns of benchmark indices forthe asset classes, and not the returns of securities, fund or other investment products. Models may contain allocations to Hedge Funds, Private Equity and Private Real Estate. The benchmark indices for these asset classes are not issued on a daily basis. When calculating model performance on a day for which no benchmark index data is issued, we have assumed straight line growth between the index levels issued before and after that date. FEES REDUCE THE PERFORMANCE OF ACTUALACCOUNTS: None of the fees or other expenses (e.g. commissions, mark-ups, mark-downs, fees) associated with actual trading or accounts are reflected in the GIC Asset Allocation Models. The GIC Asset Allocation Models and any model performance included in this presentation are intended as educational materials. Were a client to use these models in connection with investing, any investment decisions made would be subject to transaction and other costs which, when compounded over a period of years, would decrease returns. Information regarding Morgan Stanley's standard advisory fees is available in the Form ADV Part z, which is available at www.morganstanley.com/adv. The following hypothetical illustrates the compound effect fees have on investment returns: For example, if a portfolio's annual rate of return is 15%for 5 years and the account pays 5o basis points in fees per annum, the gross cumulative five-year return would be ioi.i% and the five-year return net of fees would be 96.8%. Fees and/or expenses would apply to clients who invest in investments in an account based on these asset allocations, and would reduce clients' returns. The impact of fees and/or expenses can be material. Variable annuities are long-term investments designed for retirement purposes and may be subject to market fluctuations, investment risk, and possible loss of principal. All guarantees, including optional benefits, are based on the financial strength and claims -paying ability of the issuing insurance company and do not apply to the underlying investment options. Optional riders may not be able to be purchased in combination and are available at an additional cost. Some optional riders must be elected at time of purchase. Optional riders maybe subject to specific limitations, restrictions, holding periods, costs, and expenses as specified by the insurance company in the annuity contract. If you are investing in a variable annuity through a tax -advantaged retirement plan such as an IRA, you will get no additional tax advantage from the variable annuity. Under these circumstances, you should only consider buying a variable annuity because of its other features, such as lifetime income payments and death benefits protection. Taxable distributions (and certain deemed distributions) are subject to ordinary income tax and, if taken prior to age 591h, maybe subject to a io%federal income tax penalty. Early withdrawals will reduce the death benefit and cash surrender value. Equity securities may fluctuate in response to news on companies, industries, market conditions and general economic environment. Ultrashort-term fixed income asset class is comprised of fixed income securities with high quality, very short maturities. They are therefore subject to the risks associated with debt securities such as credit and interest rate risk. Master Limited Partnerships (MLPs) are limited partnerships or limited liability companies that are taxed as partnerships and whose interests (limited partnership units or limited liability company units) are traded on securities exchanges like shares of common stock. Currently, most MLPs operate in the energy, natural resources or real estate sectors. Investments in MLP interests are subject to the risks generally applicable to companies in the energy and natural resources sectors, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk. Individual MLPs are publicly traded partnerships that have unique risks related to their structure. These include, but are not limited to, their reliance on the capital markets to fund growth, adverse ruling on the current tax treatment of distributions (typically mostly tax deferred), and commodity volume risk. The potential tax benefits from investing in MLPs depend on their being treated as partnerships for federal income tax purposes and, if the MLP is deemed to be a corporation, then its income would be subject to federal taxation at the entity level, reducing the amount of cash available for distribution to the fund which could result in a reduction of the fund's value. MLPs carry interest rate risk and may underperform in a rising interest rate environment. MLP funds accrue deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax -deferred return of capital and for any net operating gains as well as capital appreciation of its investments; this deferred tax liability is reflected in the daily NAV, and, as a result, the MLP fund's after-tax performance could differ significantly from the underlying assets even if the ore -tax Derformance is closely Graystone DISCLOSURES Con'suhings" Page 29 WEALTH MANAGEMENT Morgan Stanley tracked. Investing in commodities entails significant risks. Commodity prices maybe affected by a variety of factors at anytime, including but not limited to, (i) changes in supply and demand relationships, (ii) governmental programs and policies, (iii) national and international political and economic events, war and terrorist events, (iv) changes in interest and exchange rates, (v) trading activities in commodities and related contracts, (vi) pestilence, technological change and weather, and (vii) the price volatility of a commodity. In addition, the commodities markets are subject to temporary distortions or other disruptions due to various factors, including lack of liquidity, participation of speculators and government intervention. Physical precious metals are non -regulated products. Precious metals are speculative investments, which may experience short-term and long term price volatility. The value of precious metals investments may fluctuate and may appreciate or decline, depending on market conditions. Unlike bonds and stocks, precious metals do not make interest or dividend payments. Therefore, precious metals may not be appropriate for investors who require current income. Precious metals are commodities that should be safely stored, which may impose additional costs on the investor. REITs investing risks are similar to those associated with direct investments in real estate: property value fluctuations, lack of liquidity, limited diversification and sensitivity to economic factors such as interest rate changes and market recessions. Risks of private real estate include: illiquidity; a long-term investment horizon with a limited or nonexistent secondary market; lack of transparency; volatility (risk of loss); and leverage. Principal is returned on a monthly basis over the life of a mortgage -backed security. Principal prepayment can significantly affect the monthly income stream and the maturity of any type of MBS, including standard MBS, CMOs and Lottery Bonds. Asset -backed securities generally decrease in value as a result of interest rate increases, but may benefit less than other fixed -income securities from declining interest rates, principally because of prepayments. Yields are subject to change with economic conditions. Yield is only one factor that should be considered when making an investment decision. Credit ratings are subject to change. Duration, the most commonly used measure of bond risk, quantifies the effect of changes in interest rates on the price of a bond or bond portfolio. The longer the duration, the more sensitive the bond or portfolio would be to changes in interest rates. The majority of $25 and $i000 par preferred securities are "callable" meaning that the issuer may retire the securities at specific prices and dates prior to maturity. Interest/dividend payments on certain preferred issues may be deferred by the issuer for periods of up to 5 to io years, depending on the particular issue. The investor would still have income tax liability even though payments would not have been received. Price quoted is per $25 or $s,000 share, unless otherwise specified. Current yield is calculated by multiplying the coupon by par value divided by the market price. The initial interest rate on a floating-rate security may be lower than that of a fixed-rate security of the same maturity because investors expect to receive additional income due to future increases in the floating security's underlying reference rate. The reference rate could be an index or an interest rate. However, there can be no assurance that the reference rate will increase. Some floating-rate securities may be subject to call risk. The market value of convertible bonds and the underlying common stock(s) will fluctuate and after purchase may be worth more or less than original cost. If sold prior to maturity, investors may receive more or less than their original purchase price or maturity value, depending on market conditions. Callable bonds may be redeemed by the issuer prior to maturity. Additional call features may exist that could affect yield. Some $25 or ss000 par preferred securities are QDI (Qualified Dividend Income) eligible. Information on QDI eligibility is obtained from third party sources. The dividend income on QDI eligible preferreds qualifies for a reduced tax rate. Many traditional `dividend paying' perpetual preferred securities (traditional preferreds with no maturity date) are QDI eligible. In order to qualify for the preferential tax treatment all qualifying preferred securities must be held by investors for a minimum period — 91 days during a 18o day window period, beginning go days before the ex -dividend date. Companies paying dividends can reduce or cut payouts at any time. Nondiversification: For a portfolio that holds a concentrated or limited number of securities, a decline in the value of these investments would cause the portfolio's overall value to decline to a greater degree than a less concentrated portfolio. The indices selected by Morgan Stanley Wealth Management to measure performance are representative of broad asset classes. Morgan Stanley Wealth Management retains the right to change representative indices at any time. Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies. Growth investing does not guarantee a profit or eliminate risk. The stocks of these companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. Value investing does not guarantee a profit or eliminate risk. Not all companies whose stocks are considered to be value stocks are able to turn their business around or successfully employ corrective strategies which would result in stock prices that do not rise as initially expected . Any type of continuous or periodic investment plan does not assure a profit and does not protect against loss in declining markets. Since such a plan involves continuous investment in securities regardless of fluctuating price levels of such securities, the investor should consider his financial ability to continue his purchases through periods of low price levels. This material is disseminated in the United States of America by Morgan Stanley Smith Barney LLC. Morgan Stanley Wealth Management is not acting as a municipal advisor to any municipal entity or obligated person within the meaning of Section i5B of the Securities Exchange Act (the "Municipal Advisor Rule") and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of the Municipal Advisor Rule. This material, or any portion thereof, may not be reprinted, sold or redistributed without the written consent of Morgan Stanley Smith Barney LLC. © zozo Morgan Stanley Smith Barney LLC. Member SIPC. DISCLOSURES Page 30 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Asset Allocation & Time Weighted Performance as of September 30, 2020 Allocation Market Quarter Value % To M Date Total Fund 17,177,800 100.00 5.96 Policy Index 1 Domestic Equity Highland - Large Cap Value 3,667,077 21.35 Russell 1000 VL Highland - Large Cap Growth 4,371,267 25.45 Russell 1000 Gr Boston Partners - SMID Value 835,734 4.87 Russell 2500 VL Fiera Capital - SMID Growth 1,018,061 5.93 Russell 2500 GR International Equity Highland - Intl Value 721,590 4.20 MSCI EAFE Net Renaissance - International Growth 1,040,562 6.06 MSCI AC World ex US Net Fixed Income Highland - Fixed Income 4,147,353 24.14 Barclays Aggregate Alternative Investments Center Coast - MLP 345,523 2.01 Alerian MLP Index 4.68 Performance(%) YTD Fiscal 1 3 YTD Year Years 0.91 7.04 7.04 5.88 1.05 6.80 6.80 6.75 5 7 Since Inception Years Years Inception Date 7.81 7.05 6.92 02/01/2011 8.37 7.62 7.92 4.71 -13.79 -6.86 -6.86 1.99 N/A N/A 2.80 08/01/2017 5.59 -11.58 -5.02 -5.02 2.63 N/A N/A 3.06 12.90 22.62 34.55 34.55 18.59 N/A N/A 18.74 08/01/2017 13.22 24.33 37.53 37.53 21.67 N/A N/A 21.59 6.12 -19.97 -12.90 -12.90 -3.13 N/A N/A -2.22 08/01/2017 3.54 -18.39 -12.62 -12.62 -2.69 N/A N/A -1.63 14.38 18.13 32.01 32.01 15.96 N/A N/A 16.17 08/01/2017 9.37 11.58 23.38 23.38 13.36 N/A N/A 14.13 6.69 -9.67 -0.17 -0.17 0.02 N/A N/A 0.37 08/01/2017 4.80 -7.09 0.49 0.49 0.62 N/A N/A 1.35 7.45 -7.71 -0.27 -0.27 -2.86 N/A N/A -2.33 08/01/2017 6.25 -5.44 3.00 3.00 1.16 N/A N/A 1.86 1.37 6.67 6.69 6.69 5.15 N/A N/A 5.01 08/01/2017 0.62 6.79 6.99 6.99 5.24 N/A N/A 5.09 -12.40 -43.58 -44.77 -44.77 -18.10 N/A N/A -18.03 08/01/2017 -16.26 -46.16 -48.35 -48.35 -20.75 N/A N/A -20.86 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 31 Consulting'" City of Sebastian Police Officers' Retirement Plan Asset Allocation & Time Weighted Performance as of September 30, 2020 Allocation Market Quarter Value % To YTD Fiscal YTD ($) Date Intercontinental - Private Real Estate 724,831 4.22 0.90 1.15 4.41 NCREIF Property Idx 0.74 0.45 2.01 Cash Receipt & Disbursement 305,801 1.78 0.00 0.28 0.50 90-Day T-Bills 0.03 0.56 1.02 Performance(%) 1 3 5 7 Since Inception Year Years Years Years Inception Date 4.41 8.26 N/A N/A 8.26 10/01/2017 2.01 5.11 N/A N/A 5.11 0.50 1.37 N/A 1.02 1.65 N/A The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 32 N/A 1.33 08/01/2017 N/A 1.62 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Asset Allocation & Net Dollar Weighted Performance (IRR) as of September 30, 2020 Total Fund 100.00 5.81 Domestic Equity Highland - Large Cap Value 21.35 4.43 Highland - Large Cap Growth 25.45 12.87 Boston Partners - SMID Value 4.87 5.10 Fiera Capital - SMID Growth 5.93 14.19 International Equity Highland - Intl Value 4.20 6.69 Renaissance - International Growth 6.06 7.29 Fixed Income Highland - Fixed Income 24.14 1.29 Alternative Investments Center Coast - MLP 2.01 -12.51 Intercontinental - Private Real Estate 4.22 0.65 Cash Receipt & Disbursement 1.78 -0.45 Fiscal 1 3 5 7 Since Inception YTD Year Years Years Years Inception Date 6.16 6.16 5.14 7.07 6.35 6.31 01/31/2011 -6.92 -6.92 2.13 N/A N/A 3.23 07/31/2017 33.53 33.53 17.63 N/A N/A 17.76 07/31/2017 -13.62 -13.62 -4.58 N/A N/A -3.68 07/31/2017 31.03 31.03 15.02 N/A N/A 15.28 07/31/2017 -0.54 -0.54 -0.50 N/A N/A -0.14 07/31/2017 -0.90 -0.90 -3.53 N/A N/A -3.02 07/31/2017 6.36 6.36 4.71 N/A N/A 4.58 07/31/2017 -45.07 -45.07 -18.44 N/A N/A -18.34 07/31/2017 3.03 3.03 6.76 N/A N/A 6.76 10/15/2017 -3.16 -3.16 -3.98 N/A N/A -3.84 07/31/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a Graystone guarantee of future results. sM Page 33 Consulting City of Sebastian Police Officers' Retirement Plan Total Fund - Executive Summary as of September 30, 2020 Manager Performance Chart 16.0 12.0 v 8.0 4.0 0.0 Current Fiscal 1 3 5 7 Since Quarter YTD Year Years Years Years Inception Manager Annualized Performance Current Fiscal 1 3 5 7 Inception Quarter YTD Year Years Years Years 02/01/2011 Total Fund 5.96 7.04 7.04 5.88 7.81 7.05 6.92 Policy Index 1 4.68 6.80 6.80 6.75 8.37 7.62 7.92 Differences 1.28 0.24 0.24 -0.87 -0.56 -0.57 -1.00 Historic Asset Growth Current Fiscal 1 3 5 7 Inception Quarter YTD Year Years Years Years 02/01/2011 Total Fund Beginning Market Value 16,198 15,814 15,814 14,003 11,292 10,073 7,730 Net Contributions 37 366 366 839 1,107 1,386 2,296 Fees/Expenses -21 -98 -98 -306 -443 -566 -684 Income 79 354 354 1,080 1,700 2,180 2,750 Gain/Loss 885 741 741 1,562 3,521 4,105 5,086 Ending Market Value 17,178 17,178 17,178 17,178 17,178 17,178 17,178 Modern Portfolio Statistics Standard Maximum Return Deviation Beta Drawdown Total Fund 6.92 9.29 0.98 -17.43 Policy Index 1 7.92 9.27 1.00 -17.24 Manager Risk & Return 12.0 10.0 8.0 6.0 - 0 4.0 - 2.0 - 0.0 - -2.0 - -4.0 1 1 1 1 1 1 1 1 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Risk (Standard Deviation %) Total Fund O Policy Index 1 . 90-Day T-Bills Up Down Sharpe Inception Capture Alpha Capture Ratio R-Squared Date 97.35 106.49 -0.77 0.70 0.95 02/01/2011 100.00 100.00 0.00 0.80 1.00 02/01/2011 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 34 Consulting'" City of Sebastian Police Officers' Retirement Plan Total Fund - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $24.0 $18.7 $18.0 $17.2 $12.0 i $9.3 $6.0 $0.0 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/18 1/19 7/19 1/20 9/20 — Total Fund Policy Index 1 — Net Cash Flow Quarterly Change in Assets Market Value Net Return On Market Value As of Transfers Contributions Distributions Fees Expenses Income Investment As of 07/01/2020 09/30/2020 Total Fund 16,198.21 - 13,031.58-12,994.48 -21.10 - 78.56 963.59 17,177.80 Distribution of Returns 45 30 0 28 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 4 To 5 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 35 >5 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Value - Executive Summary as of September 30, 2020 Manager Performance Chart 12.0 6.0 0.0 -6.0 -12.0 Current Fiscal Quarter YTD Manager Annualized Performance Current Quarter Highland - Large Cap Value 4.71 Russell 1000 VL 5.59 Differences -0.88 Historic Asset Growth Current Quarter Highland - Large Cap Value Beginning Market Value 3,131 Net Contributions 385 Fees/Expenses -4 Income 20 Gain/Loss 135 Ending Market Value 3,667 Modern Portfolio Statistics Return Highland - Large Cap Value 2.80 Russell 1000 VL 3.06 1 3 Since Year Years Inception Manager Risk & Return 3.6 32 2.8 . 2.4 - a 2.0 - Fiscal 1 3 Inception YTD Year Years 08/01/2017 -6.86 -6.86 1.99 2.80 -5.02 -5.02 2.63 3.06 -1.84 -1.84 -0.64 -0.26 Fiscal 1 3 Inception YTD Year Years 08/01/2017 3,534 3,534 4,467 4,342 384 384 -1,010 -1,010 -17 -17 -59 -59 97 97 288 305 -330 -330 -18 89 3,667 3,667 3,667 3,667 Standard Maximum Beta Deviation Drawdown 17.71 1.00 -28.00 17.67 1.00 -26.73 1.6 - 1.2 0.8 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Risk (Standard Deviation %) Highland - Large Cap Value Q Russell 1000 VL . 90-Day T-Bills Up Down Alpha Sharpe R-Squared Inception Capture Capture Ratio Date 98.85 99.79 -0.23 0.16 0.99 08/01/2017 100.00 100.00 0.00 0.17 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 36 Consulting'" City of Sebastian Police Officers' Retirement Plan Highland Large Cap Value - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $6.3 $4.5 $3.7 $3.6 $3.7 $3.3 $2.7 v $1.8 7/17 10/17 1/18 4/18 7/18 10/18 1/19 4/19 7/19 10/19 1/20 4/20 7/20 9/20 — Highland - Large Cap Value Russell 1000 VL — Net Cash Flow Quarterly Change in Assets Market Value Net As of Transfers Contributions Distributions Fees 07/01/2020 Highland - Large Cap Value 3,130,676.59 - 723,995.19-339,287.41-3,910.09 Distribution of Returns 16 12 U 8 U M w 4 4 3 2 Iff 0 0 Expenses Return On Investment - 155,603.08 9 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 37 0 4 To 5 Market Value As of 09/30/2020 3,667,077.36 3 W >5 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Value - Quarterly Performance Attributes as of September 30, 2020 Allocation Communication Services — Consumer Discretionary —� Consumer Staples —� Energy —� Financials Health Care — Industrials — Information Technology —� Materials J� Real Estate J Utilities — 0.0 6.0 12.0 18.0 24.0 30.0 Highland - Large Cap Value Russell 1000 VL Total Attribution Communication Services - Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Performance Communication Services — Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — Utilities — 36.0 -40.0 -20.0 0.0 Highland - Large Cap Value Russell 1000 VL Materials — Real Estate — Utilities — i i i -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 38 0.4 20.0 0.6 40.0 0.8 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Value - Quarterly Performance Attributes as of September 30, 2020 Allocation - 07/01/2020 Performance - Quarter Ending September 30, 2020 Portfolio Benchmark Portfolio Benchmark Communication Services 6.73 9.33 7.76 8.41 Consumer Discretionary 7.93 6.98 19.09 15.33 Consumer Staples 6.71 8.12 7.02 9.06 Energy 6.72 5.28 -22.49 -19.53 Financials 22.90 18.52 2.30 3.76 Health Care 15.31 14.08 7.05 7.08 Industrials 11.57 12.34 12.84 11.45 Information Technology 10.31 10.22 3.05 -0.54 Materials 2.76 4.48 7.26 11.96 Real Estate 3.14 4.75 4.78 1.73 Utilities 5.91 5.91 5.96 5.83 Total 100.00 100.00 5.11 5.57 Attribution Sector Stock Interaction Total -0.07 -0.06 0.02 -0.12 0.09 0.26 0.04 0.39 -0.05 -0.17 0.03 -0.19 -0.36 -0.16 -0.04 -0.56 -0.08 -0.27 -0.06 -0.41 0.02 0.00 0.00 0.01 -0.04 0.17 -0.01 0.12 -0.01 0.37 0.00 0.36 -0.11 -0.21 0.08 -0.24 0.06 0.15 -0.05 0.16 0.00 0.01 0.00 0.01 -0.55 0.09 0.00 -0.46 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 39 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Value - Portfolio Characteristics as of September 30, 2020 Portfolio Characteristics Top Ten Equity Holdings Portfolio Benchmark Portfolio Benchmark Active Quarterly Wtd. Avg. Mkt. Cap ($000) 141,137,348.69 121,949,919.21 Weight Weight Weight Return Median Mkt. Cap ($000) 53,564,795.17 9,433,867.92 (%) (%) (%) (%) Price/Earnings ratio 19.61 20.03 Berkshire Hathaway Inc 5.22 2.75 2.47 19.29 Price/Book ratio 2.29 2.55 Johnson & Johnson 2.77 2.29 0.48 6.57 5 Yr. EPS Growth Rate (%) 3.07 5.48 Procter & Gamble Co (The) 2.59 1.26 1.33 16.97 Beta (3 Years, Monthly) 1.00 1.00 JPMorgan Chase & Co 2.58 1.97 0.61 3.34 Number of Stocks 96 850 Verizon Communications Inc 2.34 1.66 0.68 9.14 Debt to Equity (%) -115.02 -22.61 Target Corp 1.95 0.53 1.42 31.91 Bank of America Corp 1.87 1.26 0.61 2.14 Prologis Inc 1.75 0.50 1.25 8.42 Walt Disney Co (The) 1.73 1.51 0.22 11.27 Home Depot Inc. (I'he) 1.72 1.01 0.71 11.44 % of Portfolio 24.52 14.74 9.78 Ten Best Performers Ten Worst Performers Portfolio Benchmark Active Quarterly Portfolio Benchmark Active Quarterly Weight Weight Weight Return Weight Weight Weight Return (%) (%) (%) (%) (%) (%) (%) (%) Carrier Global Corp 0.26 0.11 0.15 37.44 Occidental Petroleum Corp 0.12 0.06 0.06 -45.25 PulteGroup Inc 1.36 0.08 1.28 36.39 Murphy Oil Corp 0.14 0.01 0.13 -34.83 Target Corp 1.95 0.53 1.42 31.91 Marathon Oil Corp 0.26 0.02 0.24 -33.17 HCA Healthcare Inc 0.81 0.11 0.70 28.46 Exxon Mobil Corp 1.24 0.98 0.26 -21.72 Corning Inc 1.14 0.16 0.98 25.99 Conocophillips 0.67 0.24 0.43 -21.03 Dell Technologies Inc 0.22 0.11 0.11 23.21 Chevron Corp 1.65 0.91 0.74 -18.12 Cummins Inc. 1.31 0.21 1.10 22.64 Cisco Systems Inc 0.85 1.13 -0.28 -14.88 Norfolk Southern Corp 1.66 0.37 1.29 22.47 Citigroup Inc 1.34 0.60 0.74 -14.78 Thermo Fisher Scientific Inc 1.37 0.49 0.88 21.91 Walgreens Boots Alliance Inc 0.22 0.18 0.04 -14.29 Johnson Controls International Plc 1.33 0.20 1.13 20.42 Lincoln National Corp 0.35 0.04 0.31 -13.80 % of Portfolio 11.41 2.37 9.04 % of Portfolio 6.84 4.17 2.67 Graystone Page 40 Consuhings" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Growth - Executive Summary as of September 30, 2020 Manager Performance Chart 60.0 45.0 30.0 15.0 0.0-0 lit Current Fiscal 1 Quarter YTD Year Manager Annualized Performance Current Fiscal Quarter YTD Highland - Large Cap Growth 12.90 34.55 Russell 1000 Gr 13.22 37.53 Differences -0.32 -2.98 Historic Asset Growth Current Fiscal Quarter YTD Highland - Large Cap Growth Beginning Market Value 4,177 3,521 Net Contributions -311 -313 Fees/Expenses -5 -18 Income 8 38 Gain/Loss 502 1,145 Ending Market Value 4,371 4,371 Modern Portfolio Statistics I" 3 Since Years Inception 1 3 Inception Year Years 08/01/2017 34.55 18.59 18.74 37.53 21.67 21.61 -2.98 -3.08 -2.87 1 3 Inception Year Years 08/01/2017 3,521 1,573 1,523 -313 1,128 1,128 -18 -43 -43 38 110 114 1,145 1,603 1,650 4,371 4,371 4,371 Manager Risk & Return 30.0 25.0 20.0 15.0 10.0 - 5.0 - 0.0 - -5.0 - -10.0 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Risk (Standard Deviation %) Highland - Large Cap Growth O Russell 1000 Gr . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Highland - Large Cap Growth 18.74 18.58 1.01 -17.36 96.28 105.94 -2.59 0.94 0.99 08/01/2017 Russell 1000 Gr 21.61 18.28 1.00 -15.98 100.00 100.00 0.00 1.08 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 41 City of Sebastian Police Officers' Retirement Plan Highland Large Cap Growth - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $8.0 0 $6.0 $4.7 $4.0 $4.4 �, a! $2.0 $2.6 $0.0 7/17 10/17 1/18 4/18 7/18 10/18 1/19 4/19 7/19 10/19 1/20 4/20 7/20 9/20 — Highland - Large Cap Growth Russell 1000 Gr — Net Cash Flow Quarterly Change in Assets Market Value Net O Market Value As of Transfers Contributions Distributions Fees Expenses Investmenteturn As of 07/01/2020 09/30/2020 Highland - Large Cap Growth 4,177,448.68 - 1,807,675.94-2,118,433.16 -5,220.28 - 509,796.02 4,371,267.20 Distribution of Returns 16 12 chi 9 8 tr 0 M w 5 5 5 5 4 2 1 1 1 IL E—ii 1 0 0 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 4 To 5 > 5 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 42 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Growth - Quarterly Performance Attributes as of September 30, 2020 Allocation Communication Services — Consumer Discretionary —� Consumer Staples i Energy Financials Am Health Care —� Industrials i Information Technology —� Materials — Real Estate Utilities — I i i i 0.0 15.0 30.0 45.0 60.0 Highland - Large Cap Growth Russell 1000 Gr Total Attribution Communication Services - Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Performance Communication Services — Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — Utilities — 75.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 Highland - Large Cap Growth Russell 1000 Gr Real Estate — Utilities — -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 43 0'6 0.8 1.0 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Growth - Quarterly Performance Attributes as of September 30, 2020 Allocation - 07/01/2020 Performance - Quarter Ending September 30, 2020 Portfolio Benchmark Portfolio Benchmark Communication Services 11.88 11.14 7.58 10.01 Consumer Discretionary 16.14 15.43 18.79 20.65 Consumer Staples 3.71 4.83 12.33 12.20 Energy 0.00 0.08 0.00 -4.04 Financials 1.43 2.10 6.13 6.38 Health Care 16.29 15.01 7.57 5.65 Industrials 3.86 4.62 15.32 13.40 Information Technology 44.74 43.90 16.23 14.98 Materials 0.30 0.82 20.82 15.03 Real Estate 1.66 2.06 -5.08 1.05 Utilities 0.00 0.02 0.00 -4.75 Total 100.00 100.00 13.54 13.21 Attribution Sector Stock Interaction Total -0.02 -0.27 -0.02 -0.31 0.05 -0.29 -0.01 -0.25 0.01 0.01 0.00 0.02 0.01 0.00 0.00 0.01 0.05 -0.01 0.00 0.04 -0.10 0.29 0.02 0.22 0.00 0.09 -0.01 0.07 0.01 0.55 0.01 0.58 -0.01 0.05 -0.03 0.01 0.05 -0.13 0.02 -0.05 0.00 0.00 0.00 0.00 0.06 0.29 -0.02 0.33 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 44 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Large Cap Growth - Portfolio Characteristics as of September 30, 2020 Portfolio Characteristics Wtd. Avg. Mkt. Cap ($000) Median Mkt. Cap ($000) Price/Earnings ratio Price/Book ratio 5 Yr. EPS Growth Rate (%) Beta (3 Years, Monthly) Number of Stocks Debt to Equity (%) Ten Best Performers Tesla Inc Pinterest Inc Advanced Micro Devices Inc United Parcel Service Inc NVIDIA Corporation Horizon Therapeutics Public Ltd Co salesforce.com Inc QUALCOMM Inc. Nike Inc Vertiv Holdings Co % of Portfolio Page 45 Portfolio 654,930,468.88 107,183,637.80 39.12 11.36 19.36 1.01 69 -45.55 Benchmark 652,346,692.13 13,809,199.30 38.38 11.28 20.24 1.00 447 66.17 Top Ten Equity Holdings Portfolio Benchmark Active Quarterly Weight Weight Weight Return Apple Inc 11.05 11.31 -0.26 27.22 Microsoft Corp 9.61 9.53 0.08 3.60 Amazon.com Inc 7.43 8.08 -0.65 14.13 Facebook Inc 3.84 3.81 0.03 15.34 Visa Inc 2.93 2.04 0.89 3.68 Alphabet Inc 2.82 2.04 0.78 3.96 Mastercard Inc 2.80 1.81 0.99 14.52 Alphabet Inc 2.41 2.07 0.34 3.35 Home Depot Inc. (The) 2.19 0.90 1.29 11.44 Unitedhealth Group Inc 1.72 1.48 0.24 6.14 % of Portfolio Ten Worst Performers 46.80 43.07 3.73 Portfolio Benchmark Active Quarterly Portfolio Benchmark Active Quarterly Weight Weight Weight Return Weight Weight Weight Return 1.70 1.92 -0.22 98.65 Neurocrine Biosciences Inc 0.49 0.05 0.44 -21.18 0.55 0.08 0.47 87.24 Sprouts Farmers Market Inc 0.64 0.01 0.63 -18.21 1.72 0.54 1.18 55.84 Sarepta Therapeutics Inc 0.78 0.06 0.72 -12.42 0.65 0.47 0.18 50.83 Pure Storage Inc 0.64 0.01 0.63 -11.19 1.70 1.93 -0.23 42.50 AbbVie Inc 0.73 0.88 -0.15 -9.72 1.25 0.08 1.17 39.76 Eli Lilly and Co 0.80 0.75 0.05 -9.40 1.26 1.22 0.04 34.16 Axon Enterprise Inc 0.94 0.03 0.91 -7.57 1.61 0.80 0.81 29.70 Vertex Pharmaceuticals Inc 1.30 0.43 0.87 -6.27 0.87 0.92 -0.05 28.32 American Tower Corp 0.87 0.65 0.22 -6.06 1.14 0.02 1.12 27.73 Proofpoint Inc 0.65 0.04 0.61 -5.01 12.45 7.98 4.47 % of Portfolio 7.84 2.91 4.93 Graystone Consuhings" City of Sebastian Police Officers' Retirement Plan Boston Partners - SMID Value - Executive Summary as of September 30, 2020 Manager Performance Chart 20.0 10.0 a 0.0 � -10.0 -20.0 Current Fiscal Quarter YTD Manager Annualized Performance Current Quarter Boston Partners - SMID Value 6.12 Russell 2500 VL 3.54 Differences 2.58 Historic Asset Growth Boston Partners - SMID Value Beginning Market Value Net Contributions Fees/Expenses Income Gain/Loss Ending Market Value Modern Portfolio Statistics 1 3 Since Year Years Inception Fiscal 1 3 Inception YTD Year Years 08/01/2017 -12.90 -12.90 -3.13 -2.22 -12.62 -12.62 -2.69 -1.63 -0.28 -0.28 -0.44 -0.59 Current Fiscal 1 3 Inception Quarter YTD Year Years 08/01/2017 668 855 855 689 672 130 96 96 245 245 -2 -8 -8 -23 -23 3 15 15 41 43 36 -123 -123 -117 -101 836 836 836 836 836 Manager Risk & Return 3.6 2." 1.8 - 0.9 - 0.0 - Y -1.8 - -2.7 - -3.6 - -4.5 1 1 1 1 1 1 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 Risk (Standard Deviation %) Boston Partners - SMID Value O Russell 2500 VL . 90-Day T-Bills 1 1 25.0 30.0 35.0 Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Boston Partners - SMID Value -2.22 25.00 1.11 -38.80 110.37 110.28 0.02 -0.02 0.98 08/01/2017 Russell 2500 VL -1.63 22.30 1.00 -34.64 100.00 100.00 0.00 -0.03 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 46 City of Sebastian Police Officers' Retirement Plan Boston SMID Value - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $1.2 a 0 $1.0 $0.9 $0.8 $0.8 $0.8 y � .� $0.6 ` v $0.4 7/17 10/17 1/18 4/18 7/18 10/18 1/19 4/19 — Boston Partners - SMID Value — Russell 2500 VL — Net Cash Flow Quarterly Change in Assets Boston Partners - SMID Value Distribution of Returns 9 6 7/19 10/19 1/20 4/20 7/20 9/20 Market Value Net As of Transfers Contributions Distributions Fees Expenses Investmenteturn O 07/01/2020 668,434.50 - 385,254.81-255,252.03-1,621.22 - 38,917.74 5 o 0 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 47 Market Value As of 09/30/2020 835,733.80 6 4To5 >5 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Boston Partners - SMID Value - Quarterly Performance Attributes as of September 30, 2020 Allocation Communication Services J� Consumer Discretionary —� Consumer Staples i Energy i Financials — Health Care —� Industrials — Information Technology — Materials — Real Estate J Utilities 0.0 8.0 16.0 Boston Partners - SMID Value Russell 2500 VL Total Attribution Communication Services - Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — Utilities — 24.0 32.0 Performance Communication Services — Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — Utilities — 40.0 -30.0 -15.0 0.0 15.0 Boston Partners - SMID Value Russell 2500 VL -1.6 -1.2 -0.8 -0.4 0.0 0.4 0.8 1.2 1.6 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 48 30.0 2.0 2.4 2.8 3.2 Graystone Consuhings" City of Sebastian Police Officers' Retirement Plan Boston Partners - SMID Value - Quarterly Performance Attributes as of September 30, 2020 Allocation - 07/01/2020 Performance - Quarter Ending September 30, 2020 Portfolio Benchmark Portfolio Benchmark Communication Services 2.13 3.13 2.74 13.38 Consumer Discretionary 11.55 12.12 12.74 15.24 Consumer Staples 3.72 3.55 -0.99 5.93 Energy 3.19 3.94 -15.51 -16.06 Financials 26.82 21.06 6.27 -2.03 Health Care 9.38 6.65 16.67 4.82 Industrials 15.84 17.05 6.09 7.25 Information Technology 17.05 8.87 7.24 1.89 Materials 7.81 6.48 2.57 9.46 Real Estate 0.79 12.67 -3.48 -1.60 Utilities 1.71 4.48 11.46 -2.45 Total 100.00 100.00 6.81 3.44 Attribution Sector Stock Interaction Total -0.10 -0.33 0.11 -0.33 -0.07 -0.30 0.01 -0.36 0.00 -0.25 -0.01 -0.25 0.14 0.02 0.00 0.16 -0.32 1.75 0.48 1.91 0.04 0.79 0.32 1.15 -0.05 -0.20 0.01 -0.23 -0.13 0.47 0.44 0.79 0.08 -0.45 -0.09 -0.46 0.60 -0.24 0.22 0.58 0.16 0.62 -0.38 0.40 0.37 1.89 1.11 3.37 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 49 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Boston Partners - SMID Value - Portfolio Characteristics as of September 30, 2020 Portfolio Characteristics Top Ten Equity Holdings Portfolio Benchmark Portfolio Benchmark Active Quarterly Wtd. Avg. Mkt. Cap ($000) 4,961,289.14 5,282,990.80 Weight Weight Weight Return Median Mkt. Cap ($000) 3,859,363.65 910,955.16 N N N N Price/Earnings ratio 15.33 16.26 SYNNEX Corp 2.12 0.22 1.90 16.94 Price/Book ratio 2.10 2.07 Lithia Motors Inc. 1.78 0.10 1.68 50.80 5 Yr. EPS Growth Rate (%) 8.51 6.05 Graphic Packaging Holding Co 1.68 0.12 1.56 1.24 Beta (3 Years, Monthly) 1.11 1.00 SLM Corp 1.68 0.09 1.59 15.53 Number of Stocks 149 1,894 EnerSys 1.49 0.10 1.39 4.53 Debt to Equity (%) 159.53 98.42 Change Healthcare inc 1.45 0.04 1.41 29.55 Science Applications International Corp 1.45 0.15 1.30 1.48 Qorvo Inc 1.43 0.00 1.43 16.72 ASGN Inc 1.39 0.02 1.37 -4.68 Icon PLC 1.37 0.00 1.37 13.43 % of Portfolio 15.84 0.84 15.00 Ten Best Performers Ten Worst Performers Portfolio Benchmark Active Quarterly Portfolio Benchmark Active Quarterly Weight Weight Weight Return Weight Weight Weight Return MR Cooper Group Inc 0.73 0.07 0.66 79.42 Diamondback Energy Inc 0.54 0.18 0.36 -27.37 BMC Stock Holdings Inc 0.62 0.11 0.51 70.37 Ciena Corp 0.68 0.23 0.45 -26.72 National General Holdings Corp 0.93 0.05 0.88 56.41 FirstEnergy Corp. 0.31 0.00 0.31 -24.98 R1 RCM INC 0.59 0.00 0.59 53.81 PQ Group Holdings Inc 0.44 0.01 0.43 -22.51 Lithia Motors Inc. 1.78 0.10 1.68 50.80 First Citizens Bancshares Inc 0.35 0.08 0.27 -21.20 Toll Brothers Inc. 0.43 0.22 0.21 49.82 Steven Madden Ltd 0.48 0.03 0.45 -21.02 Mosaic Company (The) 0.76 0.24 0.52 46.43 Covanta Holding Corp 0.22 0.02 0.20 -18.37 Hanesbrands Inc 0.45 0.21 0.24 40.83 Championx Corp 0.69 0.06 0.63 -18.14 PennyMac Financial Services Inc 0.50 0.08 0.42 39.50 ACCO Brands Corp 0.38 0.02 0.36 -17.52 PPD Inc 0.76 0.04 0.72 38.02 World Fuel Services Corp 0.95 0.05 0.90 -17.36 % of Portfolio 7.55 1.12 6.43 % of Portfolio 5.04 0.68 4.36 Graystone Page 50 Consulting'" City of Sebastian Police Officers' Retirement Plan Fiera Capital SMID Growth - Executive Summary as of September 30, 2020 Manager Performance Chart 45.0 30.0 v a 15.0 0.0 Current Fiscal Quarter YTD Manager Annualized Performance Current Quarter Fiera Capital - SMID Growth 14.38 Russell 2500 GR 9.37 Differences 5.01 Historic Asset Growth Current Quarter Fiera Capital - SMID Growth Beginning Market Value 892 Net Contributions - Fees/Expenses -2 Income 1 Gain/Loss 127 Ending Market Value 1,018 Modern Portfolio Statistics 1 Year a"_ 3 Since Years Inception Fiscal 1 3 Inception YTD Year Years 08/01/2017 32.01 32.01 15.96 16.17 23.38 23.38 13.36 14.15 8.63 8.63 2.60 2.02 Fiscal 1 3 Inception YTD Year Years 08/01/2017 799 799 690 669 -23 -23 -28 -28 -6 -6 -17 -17 5 5 14 15 243 243 359 379 1,018 1,018 1,018 1,018 Manager Risk & Return 24.0 20.0 16.0 12.0 8.0 - 4.0 - 0.0 - -4.0 - -8.0 1 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 32.0 Risk (Standard Deviation %) Fiera Capital - SMID Growth O Russell 2500 GR . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Fiera Capital - SMID Growth 16.17 21.49 0.96 -22.46 98.49 89.30 2.26 0.73 0.96 08/01/2017 Russell 2500 GR 14.15 21.86 1.00 -23.30 100.00 100.00 0.00 0.65 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 51 City of Sebastian Police Officers' Retirement Plan Fiera Capital SMID Growth - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $1.2 a $1.0 t; $0.8 $0.6 $0.4 7/17 10/17 1/18 4/18 7/18 10/18 1/19 4/19 — Fiera Capital - SMID Growth Russell 2500 GR — Net Cash Flow Quarterly Change in Assets Market Value Net As of Transfers Contributions Distributions 07/01/2020 Fiera Capital - SMID Growth 891,978.01 - 218,645.31-219,097.53 Distribution of Returns 16 12 U 8 U M w 5 4 1 0 0 $1.0 $1.0 $0.6 7/19 10/19 1/20 4/20 7/20 9/20 Fees Expenses Return On Investment -1,672.34 - 128,207.79 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 4 To 5 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 52 Market Value As of 09/30/2020 1,018,061.24 9 >5 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Fiera Capital - SMID Growth - Quarterly Performance Attributes as of September 30, 2020 Allocation Communication Services Consumer Discretionary — Consumer Staples Energy Financials Health Care — Industrials —� Information Technology —Z Materials Real Estate — Utilities — I i I 0.0 8.0 16.0 24.0 Fiera Capital - SMID Growth Russell 2500 GR Total Attribution Communication Services — Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — 32.0 40.0 0 Performance Communication Services — ■ Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — Utilities — 48.0 -40.0 -20.0 0.0 20.0 Fiera Capital - SMID Growth Russell 2500 GR Utilities — I -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 53 40.0 60.0 8.0 10.0 12.0 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Fiera Capital - SMID Growth - Quarterly Performance Attributes as of September 30, 2020 Allocation - 07/01/2020 Performance - Quarter Ending September 30, 2020 Portfolio Benchmark Portfolio Benchmark Communication Services 6.29 2.76 3.04 2.10 Consumer Discretionary 12.00 11.38 19.39 16.46 Consumer Staples 0.72 2.96 18.80 12.81 Energy 1.03 0.11 -19.96 -4.49 Financials 4.85 4.40 6.36 4.17 Health Care 31.10 30.05 31.15 9.04 Industrials 10.71 11.45 15.82 14.27 Information Technology 31.19 29.51 2.02 7.24 Materials 2.10 3.28 9.02 6.44 Real Estate 0.00 2.88 0.00 5.13 Utilities 0.00 1.22 0.00 -4.32 Total 100.00 100.00 14.96 9.28 Attribution Sector Stock Interaction Total -0.25 0.03 0.03 -0.19 0.04 0.33 0.02 0.40 -0.08 0.18 -0.13 -0.04 -0.13 -0.02 -0.14 -0.29 -0.02 0.10 0.01 0.08 0.00 6.65 0.23 6.88 -0.04 0.18 -0.01 0.13 -0.03 -1.54 -0.09 -1.66 0.03 0.08 -0.03 0.09 0.12 0.00 0.00 0.12 0.17 0.00 0.00 0.17 -0.19 5.98 -0.11 5.68 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 54 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Fiera Capital - SMID Growth - Portfolio Characteristics as of September 30, 2020 Portfolio Characteristics Wtd. Avg. Mkt. Cap ($000) Median Mkt. Cap ($000) Price/Earnings ratio Price/Book ratio 5 Yr. EPS Growth Rate (%) Beta (3 Years, Monthly) Number of Stocks Debt to Equity (%) Ten Best Performers Immunomedics Inc iRhythm Technologies Inc NovoCure Ltd Generac Holdings Inc BeiGene Ltd Mosaic Company (I'he) Dick's Sporting Goods Inc. Hanesbrands Inc Guardant Health Inc Fortune Brands Home & Security Inc % of Portfolio Page 55 Top Ten Equity Holdings Portfolio Benchmark Portfolio Benchmark Active Quarterly 10,303,890.38 6,053,804.74 Weight Weight Weight Return 7,101,128.87 1,159,778.97 (%) (%) (%) (%) 24.33 32.64 Immunomedics Inc 5.68 0.95 4.73 139.92 5.89 5.85 Etsy Inc 3.74 0.78 2.96 14.50 25.08 20.35 iRhythm Technologies Inc 3.18 0.35 2.83 105.46 0.96 1.00 Tractor Supply Co 2.29 0.00 2.29 9.05 72 1,291 Entegris Inc 2.17 0.50 1.67 26.04 409.88 157.71 Exelixis Inc 2.17 0.15 2.02 2.99 Okra Inc 2.12 0.00 2.12 6.80 Synchrony Financial 2.05 0.00 2.05 19.27 Berry Global Group Inc 2.02 0.12 1.90 9.02 Biomarin Pharmaceutical Inc 2.02 0.00 2.02 -38.32 % of Portfolio 27.44 2.85 24.59 Ten Worst Performers Portfolio Benchmark Active Quarterly Portfolio Benchmark Active Quarterly Weight Weight Weight Return Weight Weight Weight Return (%) (%) (%) (%) (%) (%) (%) (%) 5.68 0.95 4.73 139.92 Biomarin Pharmaceutical Inc 2.02 0.00 2.02 -38.32 3.18 0.35 2.83 105.46 WPX Energy Inc 0.25 0.00 0.25 -23.20 1.44 0.60 0.84 87.71 Cogent Communications Holdings Inc 0.35 0.14 0.21 -21.56 1.12 0.58 0.54 58.81 Neurocrine Biosciences Inc 1.04 0.48 0.56 -21.18 1.71 0.00 1.71 52.04 Viking Therapeutics Inc 0.24 0.00 0.24 -19.28 1.43 0.00 1.43 46.43 Championx Corp 0.48 0.00 0.48 -18.14 1.23 0.00 1.23 41.07 Western Alliance Bancorporation 0.86 0.00 0.86 -15.96 1.02 0.00 1.02 40.83 Valeant Pharmaceuticals Int'l Inc 1.61 0.00 1.61 -15.03 1.24 0.45 0.79 37.78 Fortinet Inc 1.78 0.00 1.78 -14.18 0.92 0.00 0.92 35.72 bluebird bio Inc 0.78 0.09 0.69 -11.62 18.97 2.93 16.04 % of Portfolio 9.41 0.71 8.70 Graystone Consuhings" City of Sebastian Police Officers' Retirement Plan Highland - International Value - Executive Summary as of September 30, 2020 Manager Performance Chart 12.0 8.0 4.0 a 0.0 -4.0 Current Fiscal 1 Quarter YTD Year Manager Annualized Performance Current Fiscal Quarter YTD Highland - Intl Value 6.69 -0.17 MSCI EAFE Net 4.80 0.49 Differences 1.89 -0.66 Historic Asset Growth Current Fiscal Quarter YTD Highland - Intl Value Beginning Market Value 677 726 Net Contributions - -1 Fees/Expenses - -3 Income 3 15 Gain/Loss 43 -16 Ending Market Value 722 722 Modern Portfolio Statistics 3 Since Years Inception 1 3 Inception Year Years 08/01/2017 -0.17 0.02 0.37 0.49 0.62 1.35 -0.66 -0.60 -0.98 1 3 Inception Year Years 08/01/2017 726 709 701 -1 24 24 -3 -10 -10 15 50 52 -16 -51 -45 722 722 722 Manager Risk & Return 2.1 1.8 1.5 1.2 - 0 0.9 - 0.6 - 0.3 - 0.0 W -0.3 1 1 1 1 1 1 1 1 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Risk (Standard Deviation %) Highland - Intl Value O MSCI EAFE Net . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Highland - Intl Value 0.37 18.13 1.18 -28.37 115.76 120.00 -0.86 0.03 0.94 08/01/2017 MSCI EAFE Net 1.35 14.90 1.00 -22.83 100.00 100.00 0.00 0.06 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 56 Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - International Value - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $1.0 0 $0.8 $0.6 $0.4 7/17 10/17 1/18 4/18 7/18 10/18 1/19 — Highland -Intl Value — MSCI EAFE Net Net Cash Flow Quarterly Change in Assets Market Value Net $0.7 'N/ `r 10.7 0.7 4/19 7/19 10/19 1/20 4/20 7/20 9/20 As of Transfers Contributions Distributions 07/01/2020 Highland - Intl Value 676,581.41 - 3,546.50-3,783.72 Distribution of Returns 12 9 6 3 0 0 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 57 Fees Expenses Return On Investment 45,245.84 Market Value As of 09/30/2020 721,590.03 7 3To4 4To5 >5 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Intl Value - Quarterly Performance Attributes as of September 30, 2020 Allocation Communication Services - Consumer Discretionary -i Consumer Staples -� Energy i Financials -- Health Care - Industrials - Information Technology - Materials - Real Estate - Utilities -00 Other -Am i I i i i 0.0 6.0 12.0 18.0 24.0 30.0 Highland - Intl Value 0 MSCI EAFE Net Total Attribution Communication Services - Consumer Discretionary - Consumer Staples - Energy - Financials - Health Care - Industrials - Information Technology - Materials - Real Estate - Utilities - Other - Performance Communication Services - Consumer Discretionary - i Consumer Staples - Energy - Financials - Health Care - i Industrials - Information Technology - i Materials - Real Estate - Utilities - Other - 36.0 -45.0 -30.0 -15.0 0.0 15.0 Highland - Intl Value MSCI EAFE Net E i i i i i i 1 1 -2.0 -1.6 -1.2 -0.8 -0.4 0.0 0.4 0.8 1.2 1.6 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 58 30.0 2.0 2.4 2.8 3.2 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Intl Value - Quarterly Performance Attributes as of September 30, 2020 Allocation - 07/01/2020 Performance - Quarter Ending September 30, 2020 Portfolio Benchmark Portfolio Benchmark Communication Services 9.03 5.41 1.43 4.38 Consumer Discretionary 22.57 11.34 15.54 9.66 Consumer Staples 7.66 12.02 8.82 4.45 Energy 3.67 3.38 -19.85 -13.31 Financials 8.13 16.07 -1.11 -1.29 Health Care 11.89 14.47 -2.12 2.83 Industrials 5.89 14.50 7.84 10.33 Information Technology 22.49 8.33 12.08 8.13 Materials 5.57 7.27 8.25 10.76 Real Estate 0.00 3.18 0.00 2.91 Utilities 0.99 4.04 -1.67 3.09 Other 2.11 0.00 10.25 0.00 Total 100.00 100.00 7.08 4.79 Attribution Sector Stock Interaction Total -0.02 -0.16 -0.11 -0.28 0.55 0.67 0.66 1.87 0.01 0.53 -0.19 0.35 -0.05 -0.22 -0.02 -0.29 0.48 0.03 -0.01 0.50 0.05 -0.72 0.13 -0.54 -0.48 -0.36 0.21 -0.62 0.47 0.33 0.56 1.36 -0.10 -0.18 0.04 -0.24 0.06 0.00 0.00 0.06 0.05 -0.19 0.15 0.01 0.12 0.00 0.00 0.12 1.15 -0.28 1.42 2.29 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 59 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Highland - Intl Value - Portfolio Characteristics as of September 30, 2020 Portfolio Characteristics Wtd. Avg. Mkt. Cap ($000) Median Mkt. Cap ($000) Price/Earnings ratio Price/Book ratio 5 Yr. EPS Growth Rate (%) Beta (3 Years, Monthly) Number of Stocks Debt to Equity (%) Ten Best Performers Taiwan Semiconductor Alibaba Group Holding Ltd Daimler AG JD.com Inc Royal Caribbean Group Arcelormittal SA Softbank Group Corp Intercontinental Hotels Group PLC Sensata Tech The Unilever Group % of Portfolio Page 60 Top Ten Equity Holdings Portfolio Benchmark Portfolio Benchmark Active Quarterly 118,152,561.57 64,391,488.76 Weight Weight Weight Return 38,936,391.58 10,289,415.64 (%) (%) (%) (%) 19.56 19.05 Sony Corp 7.62 0.70 6.92 11.02 2.70 2.87 STMicroelectronics NV 6.14 0.14 6.00 12.12 6.88 3.93 Philips Electronics NV 4.74 0.32 4.42 0.66 1.18 1.00 Siemens AG 4.72 0.71 4.01 7.52 54 902 SAP AG 4.39 1.19 3.20 11.29 101.01 112.45 Glaxosmithkhne PLC 3.98 0.69 3.29 -6.62 Kyocera Corp 3.92 0.13 3.79 4.53 Hitachi Ltd 3.78 0.24 3.54 6.44 Taiwan Semiconductor 2.85 0.00 2.85 43.55 Honda Motor Co Ltd 2.77 0.28 2.49 -7.28 % of Portfolio Ten Worst Performers 44.91 4.40 40.51 Portfolio Benchmark Active Quarterly Portfolio Benchmark Active Quarterly Weight Weight Weight Return Weight Weight Weight Return (%) (%) (%) N N (%) (%) N 2.85 0.00 2.85 43.55 BP PLC 1.56 0.43 1.13 -24.12 2.07 0.00 2.07 36.29 Bright Scholar Education Holdings Ltd 0.31 0.00 0.31 -17.42 2.42 0.34 2.08 31.84 Vodafone Group PLC 0.50 0.26 0.24 -15.81 2.73 0.00 2.73 28.96 Ovintiv Inc 0.34 0.00 0.34 -13.66 2.32 0.00 2.32 28.69 Petrobras 0.81 0.00 0.81 -13.06 0.34 0.07 0.27 23.49 Nippon T&T 2.21 0.19 2.02 -12.63 1.29 0.70 0.59 21.35 Deutsche Bank AG 0.38 0.12 0.26 -11.76 2.40 0.07 2.33 18.30 Aegon NV 0.24 0.03 0.21 -10.58 0.76 0.00 0.76 15.87 Honda Motor Co Ltd 2.77 0.28 2.49 -7.28 2.47 0.64 1.83 15.30 Glaxosmithkline PLC 3.98 0.69 3.29 -6.62 19.65 1.82 17.83 % of Portfolio 13.10 2.00 11.10 Graystone Consuhings" City of Sebastian Police Officers' Retirement Plan Renaissance - International Growth - Executive Summary as of September 30, 2020 Manager Performance Chart Manager Risk & Return 15.0 3.6 10.0 2. 5.0 0.0 1.8 - 0.9 - -5.0 -10.0 0.0 - Current Fiscal 1 3 Since Quarter YTD Year Years Inception -0.9 - Manager Annualized Performance -1.a - Current Fiscal 1 3 Inception Quarter YTD Year Years 08/01/2017 -2.7 - Renaissance - International Growth 7.45 -0.27 -0.27 -2.86 -2.33 MSCI AC World ex US Net 6.25 3.00 3.00 1.16 1.86 -3.6 - Differences 1.20 -3.27 -3.27 -4.02 -4.19 Historic Asset Growth -4.5 1 1 Current Fiscal 1 3 Inception -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 28.0 Quarter YTD Year Years 08/01/2017 Risk (Standard Deviation %) Renaissance - International Growth ■ Renaissance - International Growth O MSCI AC World ex US Net Beginning Market Value 970 1,051 1,051 1,029 1,016 Net Contributions - -1 -1 127 127 . 90-Day T-Bills Fees/Expenses -2 -6 -6 -20 -20 Income 7 19 19 70 72 Gain/Loss 65 -22 -22 -165 -154 Ending Market Value 1,041 1,041 1,041 1,041 1,041 Modern Portfolio Statistics Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Renaissance - International Growth -2.33 18.66 1.17 -33.88 99.07 117.28 -4.08 -0.11 0.95 08/01/2017 MSCI AC World ex US Net 1.86 15.61 1.00 -24.30 100.00 100.00 0.00 0.10 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 61 City of Sebastian Police Officers' Retirement Plan Renaissance - International Growth - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $1.5 0 $1.2 $1.2 � $1.0 $0.9 $0.6 7/17 10/17 1/18 4/18 7/18 10/18 1/19 4/19 7/19 10/19 1/20 4/20 7/20 9/20 — Renaissance - International Growth MSCI AC World ex US Net — Net Cash Flow Quarterly Change in Assets Market Value Net Return On Market Value As of Transfers Contributions Distributions Fees Expenses Investment As of 07/01/2020 09/30/2020 Renaissance - International Growth 970,139.52 - 188,302.31 -188,599.53-1,574.32 - 72,293.83 1,040,561.81 Distribution of Returns 16 12 U 8 M w 5 4 3 3 1 0 0 7 0 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 62 6 2 M& 4To5 >5 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Renaissance - International Growth - Quarterly Performance Attributes as of September 30, 2020 Allocation Performance Communication Services — Consumer Discretionary —i Consumer Staples —� Energy Financials — Health Care — Industrials — Information Technology — Materials — Real Estate —4m Utilities —4m ■ 0.0 5.0 10.0 15.0 Renaissance - International Growth MSCI AC World ex US Net Total Attribution Communication Services - Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — Utilities — 20.0 25.0 Communication Services — Consumer Discretionary — Consumer Staples — Energy — Financials — Health Care — Industrials — Information Technology — Materials — Real Estate — Utilities — 30.0 -30.0 -15.0 0.0 15.0 Renaissance - International Growth MSCI AC World ex US Net i I i i i i 1 1 -1.5 -1.2 -0.9 -0.6 -0.3 0.0 0.3 0.6 0.9 1.2 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 63 30.0 1.5 1.8 45.0 2.1 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Renaissance - International Growth - Quarterly Performance Attributes as of September 30, 2020 Allocation - 07/01/2020 Performance - Quarter Ending September 30, 2020 Portfolio Benchmark Portfolio Benchmark Communication Services 13.48 7.57 1.59 3.45 Consumer Discretionary 10.87 12.56 12.52 16.54 Consumer Staples 7.12 9.95 6.06 4.66 Energy 2.61 4.81 -16.76 -7.50 Financials 13.59 18.12 1.69 -0.11 Health Care 13.81 10.67 10.93 2.68 Industrials 10.64 11.38 5.51 9.97 Information Technology 16.15 11.01 18.15 13.51 Materials 8.24 7.58 11.63 11.23 Real Estate 1.73 2.83 8.49 2.14 Utilities 1.74 3.51 -3.94 2.09 Total 100.00 100.00 7.86 6.31 Attribution Sector Stock Interaction Total -0.17 -0.14 -0.11 -0.42 -0.17 -0.51 0.07 -0.61 0.05 0.14 -0.04 0.15 0.30 -0.45 0.20 0.06 0.29 0.33 -0.08 0.54 -0.11 0.88 0.26 1.02 -0.03 -0.51 0.03 -0.50 0.37 0.51 0.24 1.12 0.03 0.03 0.00 0.07 0.05 0.18 -0.07 0.16 0.07 -0.21 0.11 -0.03 0.68 0.26 0.61 1.55 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 64 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Renaissance - International Growth - Portfolio Characteristics as of September 30, 2020 Portfolio Characteristics Wtd. Avg. Mkt. Cap ($000) Median Mkt. Cap ($000) Price/Earnings ratio Price/Book ratio 5 Yr. EPS Growth Rate (%) Beta (3 Years, Monthly) Number of Stocks Debt to Equity (%) Ten Best Performers Taiwan Semiconductor Alibaba Group Holding Ltd Neste OYJ Dr Reddy'S Laboratories Ltd Jazz Pharmaceuticals Plc Nintendo Co Ltd Geely Automobile Holdings Ltd Lenovo Group Ltd Softbank Group Corp Canadian National Railway % of Portfolio Page 65 Top Ten Equity Holdings Portfolio Benchmark Portfolio Benchmark Active Quarterly 86,851,281.51 95,729,384.17 Weight Weight Weight Return 23,862,054.17 7,794,704.87 N N N N 16.83 18.16 Alibaba Group Holding Ltd 2.78 2.57 0.21 36.29 3.00 2.84 Softbank Group Corp 2.56 0.45 2.11 21.35 8.57 6.23 Schneider Electric SA 2.54 0.32 2.22 11.98 1.17 1.00 Dr Reddy'S Laboratories Ltd 2.54 0.04 2.50 32.05 55 2,375 Sony Corp 2.53 0.45 2.08 11.02 65.50 107.68 Taiwan Semiconductor 2.40 1.72 0.68 43.55 Neste OYJ 2.32 0.10 2.22 34.88 Icon PLC 2.27 0.00 2.27 13.43 Kirkland Lake Gold Ltd 2.26 0.06 2.20 18.46 Nintendo Co Ltd 2.23 0.29 1.94 27.04 % of Portfolio Ten Worst Performers 24.43 6.00 18.43 Portfolio Benchmark Active Quarterly Portfolio Benchmark Active Quarterly Weight Weight Weight Return Weight Weight Weight Return 2.40 1.72 0.68 43.55 Vipshop Holdings Limited 1.65 0.03 1.62 -21.45 2.78 2.57 0.21 36.29 AerCap Holdings NV 1.62 0.02 1.60 -18.21 2.32 0.10 2.22 34.88 Oil Co LUKOIL PJSC 1.55 0.11 1.44 -16.76 2.54 0.04 2.50 32.05 Kddi Corp 1.25 0.19 1.06 -16.04 2.06 0.00 2.06 29.23 Astellas Pharma Inc 1.80 0.13 1.67 -10.98 2.23 0.29 1.94 27.04 Tim Participacoes SA 1.19 0.01 1.18 -10.90 1.57 0.05 1.52 26.24 JOYY Inc 2.20 0.02 2.18 -8.56 1.81 0.02 1.79 24.38 Allianz SE 1.84 0.37 1.47 -6.01 2.56 0.45 2.11 21.35 WH Group Ltd 1.59 0.04 1.55 -4.72 2.16 0.35 1.81 20.71 Veolia Environnement, Paris 1.54 0.05 1.49 -3.94 22.43 5.59 16.84 % of Portfolio 16.23 0.97 15.26 Graystone Consuhings" City of Sebastian Police Officers' Retirement Plan Highland - Fixed Income - Executive Summary as of September 30, 2020 Manager Performance Chart 12.0 9.0 v 6.0 3.0 0.0 Current Fiscal 1 3 Since Quarter YTD Year Years Inception Manager Annualized Performance Current Fiscal 1 3 Inception Quarter YTD Year Years 08/01/2017 Highland - Fixed Income 1.37 6.69 6.69 5.15 5.01 Barclays Aggregate 0.62 6.99 6.99 5.24 5.10 Differences 0.75 -0.30 -0.30 -0.09 -0.09 Historic Asset Growth Current Quarter Highland - Fixed Income Beginning Market Value 4,095 Net Contributions - Fees/Expenses -3 Income 27 Gain/Loss 29 Ending Market Value 4,147 Modern Portfolio Statistics Fiscal 1 3 Inception YTD Year Years 08/01/2017 3,900 3,900 3,885 3,980 -1 -1 -277 -389 -12 -12 -43 -43 124 124 364 390 137 137 218 209 4,147 4,147 4,147 4,147 Manager Risk & Return 6.4 5.6 4.8 4.0 - 3.2 - 2.4 - 1.6 - 0.8 - o.o -2.4 -1.6 -0.8 0.0 0.8 1.6 2.4 3.2 4.0 Risk (Standard Deviation %) Highland - Fixed Income O Barclays Aggregate . 90-Day T-Bills LW I 1 1 4.8 5.6 6.4 7.2 Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Highland - Fixed Income 5.01 5.02 0.97 -4.16 97.11 91.13 0.16 0.68 0.40 08/01/2017 Barclays Aggregate 5.10 3.28 1.00 -2.46 100.00 100.00 0.00 1.06 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 66 City of Sebastian Police Officers' Retirement Plan Highland - Fixed Income - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $24.0 0 $16.0 0 $8.0 - — $0.0 c� ($8.0) 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/18 1/19 7/19 1/20 — Highland -Fixed Income Barclays Aggregate — Net Cash Flow Quarterly Change in Assets Market Value Net Return On Market Value As of Transfers Contributions Distributions Fees Expenses Investment As of 07/01/2020 09/30/2020 Highland - Fixed Income 4,094,650.24 - 9,334,384.67-9,334,606.91-3,073.07 - 55,997.83 4,147,352.76 Distribution of Returns 45 31 30 0 0 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 4 To 5 > 5 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 67 Graystone Consulting'" City of Sebastian Police Officers' Retirement Plan Center Coast - MLP - Executive Summary as of September 30, 2020 Manager Performance Chart 0.0 -20.0 y -40.0 v a -60.0 -80.0 Current Fiscal 1 Quarter YTD Year Manager Annualized Performance Current Fiscal Quarter YTD Center Coast - MLP -12.40 -44.77 Alerian MLP Index -16.26 -48.35 Differences 3.86 3.58 Historic Asset Growth Current Fiscal Quarter YTD Center Coast - MLP Beginning Market Value 396 637 Net Contributions -1 -6 Fees/Expenses - -2 Income 9 39 Gain/Loss -58 -323 Ending Market Value 346 346 Modern Portfolio Statistics 3 Since Years Inception 1 3 Inception Year Years 08/01/2017 -44.77 -18.10 -18.03 -48.35 -20.75 -20.88 3.58 2.65 2.85 1 3 Inception Year Years 08/01/2017 637 651 672 -6 -10 -10 -2 -8 -8 39 129 140 -323 -416 -448 346 346 346 Manager Risk & Return 15.0 10.0 5.0 0.0 - o -5.0 - -10.0 - -15.0 - -20.0 - -25.0 - -30.0 1 1 1 1 1 1 1 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 Risk (Standard Deviation %) Center Coast - MLP O Alerian MLP Index . 90-Day T-Bills 60.0 Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Center Coast - MLP -18.03 39.25 0.88 -57.87 94.51 92.17 0.38 -0.32 0.97 08/01/2017 Alerian MLP Index -20.88 43.93 1.00 -62.86 100.00 100.00 0.00 -0.33 1.00 08/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 68 Consulting'" City of Sebastian Police Officers' Retirement Plan Center Coast - MLP - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $0.9 0 � $0.6 v $0.3 $0.0 7/17 10/17 1/18 4/18 7/18 10/18 1/19 — Center Coast -AMP Alerian MLP Index Net Cash Flow Quarterly Change in Assets Market Value Net As of Transfers Contributions 07/01/2020 Center Coast - MLP 396,314.52 - 107,766.93 Distribution of Returns 16 12 9 4 0 $0.7 $0.3 4/19 7/19 10/19 1/20 4/20 7/20 9/20 Distributions Fees Expenses Return On Investment -109,109.15-492.69 --48,956.15 Market Value As of 09/30/2020 345,523.46 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 4 To 5 > 5 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Page 69 Consulting'" City of Sebastian Police Officers' Retirement Plan Intercontinental - Private Real Estate - Executive Summary as of September 30, 2020 Manager Performance Chart 16.0 12.0 v 8.0 4.0 0.0 Current Fiscal 1 3 Since Quarter YTD Year Years Inception Manager Annualized Performance Current Fiscal 1 3 Inception Quarter YTD Year Years 10/01/2017 Intercontinental - Private Real Estate 0.90 4.41 4.41 8.26 8.26 NCREIF Property Idx 0.74 2.01 2.01 5.11 5.11 Differences 0.16 2.40 2.40 3.15 3.15 Historic Asset Growth Current Fiscal 1 3 Inception Quarter YTD Year Years 10/01/2017 Intercontinental - Private Real Estate Beginning Market Value 724 718 718 112 112 Net Contributions -3 -15 -15 490 490 Fees/Expenses -2 -10 -10 -26 -26 Income - - - - - Gain/Loss 6 31 31 149 149 Ending Market Value 725 725 725 725 725 Modern Portfolio Statistics Manager Risk & Return 12.0 10.5 9.0 - 7.5 - '.�. 6.0 - 4.5 - 3.0 - 1.5 - 0.0 - -1.5 1 1 1 1 1 1 1 1 1 1 -1.2 -0.6 0.0 0.6 1.2 1.8 2.4 3.0 3.6 4.2 4.8 5.4 Risk (Standard Deviation %) Intercontinental - Private Real Estate O NCREIF Property Idx . 90-Day T-Bills Return Standard Beta Maximum Up Down Alpha Sharpe R-Squared Inception Deviation Drawdown Capture Capture Ratio Date Intercontinental - Private Real Estate 8.26 3.79 1.14 -0.02 150.07 2.02 2.35 1.70 0.59 10/01/2017 NCREIF Property Idx 5.11 2.56 1.00 -0.99 100.00 100.00 0.00 1.35 1.00 10/01/2017 The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Graystone Consulting'" Page 70 City of Sebastian Police Officers' Retirement Plan Intercontinental - Private Real Estate - Change in Assets & Distribution of Returns as of September 30, 2020 Historic Change in Assets $1.2 $0.9 $0.6 v $0.3 v ' $0.0 ($0.3) 10/17 1/18 4/18 7/18 10/18 1/19 4/19 7/19 10/19 — Intercontinental - Private Real Estate — NCREIF Property Idx Net Cash Flow Quarterly Change in Assets Intercontinental - Private Real Estate Distribution of Returns 40 30 10 _ $0.7 -- $0.7 $0.6 1/20 4/20 7/20 9/20 Market Value Net Return On Market Value As of Transfers Contributions Distributions Fees Expenses Investment As of 07/01/2020 09/30/2020 723,648.00 - --3,497.00-1,797.00 - 6,477.00 724,831.00 26 0 0 0 0 0 0 1 1 < -5 -5 To -4 -4 To -3 -3 To -2 -2 To -1 -1 To 0 0 To 1 1 To 2 2 To 3 3 To 4 Returns (%) The prices, quotes, or statistics contained herein have been obtained from sources believed to be reliable, however, its accuracy cannot be guaranteed. Past performance is not a guarantee of future results. Page 71 0 0 4To5 >5 Graystone Consulting'" Performance Appendix Performance Data below is net of fees. Please seethe Morgan Stanley Smith Barney LLC Form ADV Part 2 Brochure for advisory accounts and/or any applicable brokerage account trade confirmation statements for a full disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. or 3 5 10 Since Inception Account Name QTD YTDJ= Years Years Years Inception 1 Date Boston Partners - SMID Value 5.92 -20.64 -13.83 -4.18 -- -- -3.22 08/01/2017 Center Coast - MLP -12.52 -43.82 -45.08 -18.52 -- -- -18.43 08/01/2017 Fiera Capital - SMID Growth 14.19 17.50 31.07 15.13 -- -- 15.39 08/01/2017 Highland - Fixed Income 1.29 6.43 6.38 4.75 -- -- 4.63 08/01/2017 Highland - Intl Value 6.69 -9.89 -0.54 -0.45 -- -- -0.08 08/01/2017 Highland - Large Cap Growth 12.77 22.18 33.90 18.06 -- -- 18.24 08/01/2017 Highland - Large Cap Value 4.60 -14.09 -7.31 1.41 -- -- 2.25 08/01/2017 Intercontinental - Private Real Estate 0.65 0.41 3.03 6.85 -- -- 6.85 10/01/2017 Receipt & Disbursement -0.52 -2.21 -5.94 -4.83 -- -- -4.55 08/01/2017 Renaissance - International Growth 7.29 -8.14 -0.90 -3.47 -- -- -2.91 08/01/2017 All performance above are Time Weighted(TWR) performance Glossary of Terms Active Contribution Return: The gain or loss percentage of an investment relative to the performance of the investment benchmark. Active Exposure: The percentage difference in weight of the portfolio compared to its policy benchmark. Active Return: Arithmetic difference between the manager's return and the benchmark's return over a specified time period. Actual Correlation: A measure of the correlation (linear dependence) between two variables X and Y, with a value between +1 and A inclusive. This is also referred to as coefficient of correlation. Alpha: A measure of a portfolio's time weighted return in excess of the market's return, both adjusted for risk. A positive alpha indicates that the portfolio outperformed the market on a risk -adjusted basis, and a negative alpha indicates the portfolio did worse than the market. Best Quarter: The highest quarterly return for a certain time period. Beta: A measure of the sensitivity of a portfolio's time weighted return (net of fees) against that of the market. A beta greater than 1.00 indicates volatility greater than the market. Consistency: The percentage of quarters that a product achieved a rate of return higher than that of its benchmark. The higher the consistency figure, the more value a manager has contributed to the product's performance. Core: Refers to an investment strategy mandate that is blend of growth and value styles without a pronounced tilt toward either style. Cumulative Selection Return (Cumulative Return): Cumulative investment performance over a specified period of time. Distribution Rate: The most recent distribution paid, annualized, and then divided by the current market price. Distribution rate may consist of investment income, short-term capital gains, long-term capital gains, and/or return of capital. Down Market Capture: The ratio of average portfolio returns over the benchmark during periods of negative benchmark return. Lower values indicate better product performance. Downside Risk: A measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. The higher the value, the more risk the product has. Downside Semi Deviation: A statistical calculation that measures the volatility of returns below a minimum acceptable return. This return measure isolates the negative portion of volatility: the larger the number, the greater the volatility. Drawdown: A drawdown is the peak -to -trough decline during a specific period of an investment, fund or commodity. Excess over Benchmark: The percentage gain or loss of an investment relative to the investment's benchmark. Excess Return: Arithmetic difference between the manager's return and the risk -free return over a specified time period. Growth: A diversified investment strategy which includes investment selections that have capital appreciation as the primary goal, with little or no dividend payouts. These strategies can include reinvestment in expansion, acquisitions, and/or research and development opportunities. Growth of Dollar: The aggregate amount an investment has gained or lost over a certain time period, also referred to as Cumulative Return, stated in terms of the amount to which an initial dollar investment would have grown over the given time period. Investment Decision Process (IDP): A model for structuring the investment process and implementing the correct attribution methodologies. The IDP includes every decision made concerning the division of the assets under management over the various asset categories. To analyze each decisions contribution to the total return, a modeling approach must measure the marginal value of every individual decision. In this respect, the hierarchy of the decisions becomes very important. We therefore use the IDP model, which serves as a proper foundation for registering the decisions and relating them to each other. Information Ratio: Measured by dividing the active rate of return by the tracking error. The higher the Information Ratio, the more value-added contribution by the manager. Jensen's Alpha: The Jensen's alpha measure is a risk -adjusted performance measure that represents the average return on a portfolio or investment above or below that predicted by the capital asset pricing model (CAPM) given the portfolio's or investment's beta and the average market return. This metric is also commonly referred to as alpha.. Kurtosis: A statistical measure that is used to describe the distribution, or skewness, of observed data around the mean, sometimes referred to as the volatility of volatility. Maximum Drawdown: The drawdown is defined as the percent retrenchment from a fund's peak to the fund's trough value. It is in effect from the time the fund's retrenchment begins until a new fund high is reached. The maximum drawdown encompasses both the period from the fund's peak to the fund's valley (length), and the time from the fund's valley to a new fund high (recovery). It measures the largest percentage drawdown that has occurred in any fund's data record. Modern Portfolio Theory (MPT): An investment analysis theory on how risk -averse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk is an inherent part of higher reward. Mutual Fund (MF): An investment program funded by shareholders that trade in diversified holdings and is professionally managed. Peer Group: A combination of funds that share the same investment style combined as a group for comparison purposes. Peer/ Plan Sponsor Universe: A combination of asset pools of total plan investments by specific sponsor and plan types for comparison purposes. Performance Ineligible Assets: Performance returns are not calculated for certain assets because accurate valuations and transaction data for these assets are not processed or maintained by us. Common examples of these include life insurance, some annuities and some assets held externally. Performance Statistics: A generic term for various measures of investment performance measurement terms. Portfolio Characteristics: A generic term for various measures of investment portfolio characteristics. Preferred Return: A term used in the private equity (PE) world, and also referred to as a "Hurdle Rate." It refers to the threshold return that the limited partners of a private equity fund must receive, prior to the PE firm receiving its carried interest or "carry." Ratio of Cumulative Wealth: A defined ratio of the Cumulative Return of the portfolio divided by the Cumulative Return of the benchmark for a certain time period. Regression Based Analysis: A statistical process for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables Residual Correlation: Within returns -based style analysis, residual correlation refers to the portion of a strategy's return pattern that cannot be explained by its correlation to the asset -class benchmarks to which it is being compared. Return: A rate of investment performance for the specified period. Rolling Percentile Ranking: A measure of an investment portfolio's ranking versus a peer group for a specific rolling time period (i.e. Last 3 Years, Last 5 years, etc.). R-Squared: The percentage of a portfolio's performance explained by the behavior of the appropriate benchmark. High R-Squared means a higher correlation of the portfolio's performance to the appropriate benchmark. SA/CF (Separate Account/Comingled Fund): Represents an acronym for Separate Account and Commingled Fund investment vehicles. Sector Benchmark: A market index that serves as a proxy for a sector within an asset class. Sharpe Ratio: Represents the excess rate of return over the risk free return divided by the standard deviation of the excess return. The result is the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk -adjusted performance results in. Standard Deviation: A statistical measure of the range of a portfolio's performance; the variability of a return around its average return over a specified time period. Total Fund Benchmark: The policy benchmark for a complete asset pool that could consist of multiple investment mandates. Total Fund Composite: The aggregate of multiple portfolios within an asset pool or household. Tracking Error: A measure of standard deviation for a portfolio's investment performance, relative to the performance of an appropriate market benchmark. Treynor Ratio: A ratio that divides the excess return (above the risk free rate) by the portfolio's beta to arrive at a unified measure of risk adjusted return. It is generally used to rank portfolios, funds and benchmarks. A higher ratio is indicative of higher returns per unit of market risk. This measurement can help determine if the portfolio is reaching its goal of increasing returns while managing market risk. Up Market Capture: The ratio of average portfolio returns over the benchmark during periods of positive benchmark return. Higher values indicate better product performance. Upside Semi Deviation: A statistical calculation that measures the volatility of returns above an acceptable return. This return measure isolates the positive portion of volatility: the larger the number, the greater the volatility. Value: A diversified investment strategy that includes investment selections which tend to trade at a lower price relative to its dividends, earnings, and sales. Common attributes are stocks that include high dividend, low price -to -book ratio, and/or low price -to -earnings ratio. Worst Quarter: The lowest rolling quarterly return for a certain time period. Information Disclosures Performance results are annualized for time periods greater than one year and include all cash and cash equivalents, realized and unrealized capital gains and losses, and dividends, interest and income. The investment results depicted herein represent historical performance. As a result of recent market activity, current performance may vary from the figures shown. Past performance is not a guarantee of future results. Please see the Morgan Stanley Smith Barney LLC Form ADV Part 2 Brochure for advisory accounts and/or any applicable brokerage account trade confirmation statements for a full disclosure of the applicable charges, fees and expenses. Your Financial Advisor will provide those documents to you upon request. Benchmark indices and blends included in this material are for informational purposes only, are provided solely as a comparison tool and may not reflect the underlying composition and/or investment objective(s) associated with the account(s). Indices are unmanaged and not available for direct investment. Index returns do not take into account fees or other charges. Such fees and charges would reduce performance. The performance data shown reflects pastperformance, which does not guarantee future results. Investment return and principal will fluctuate so that an investor's shares when redeemed may be worth more or less than original cost. Please note, current performance may be higher or lower than the performance data shown. For up to date month -end performance information, please contact your Financial Advisor or visit the funds' company website. Investors should carefully consider the fund's investment objectives, risks, charges and expenses before investing. The prospectus and, if available the summary prospectus, contains this and other information that should be read carefully before investing. Investors should review the information in the prospectus carefully. To obtain a prospectus, please contact your Financial Advisor or visit the funds' company website. Past performance is no guarantee of future results. Investing involves market risk, including possible loss of principal. Growth investing does not guarantee a profit or eliminate risk. The stocks of these companies can have relatively high valuations. Because of these high valuations, an investment in a growth stock can be more risky than an investment in a company with more modest growth expectations. Value investing involves the risk that the market may not recognize that securities are undervalued and they may not appreciate as anticipated. Small and mid -capitalization companies may lack the financial resources, product diversification and competitive strengths of larger companies. The securities of small capitalization companies may not trade as readily as, and be subject to higher volatility than those of larger, more established companies. Bond funds and bond holdings have the same interest rate, inflation and credit risks that are associated with the underlying bonds owned by the funds. The return of principal in bond funds, and in funds with significant bond holdings, is not guaranteed. International securities' prices may carry additional risks, including foreign economic, political, monetary and/or legal factors, changing currency exchange rates, foreign taxes and differences in financial and accounting standards. International investing may not be for everyone. These risks may be magnified in emerging markets. Alternative investments, including private equity funds, real estate funds, hedge funds, managed futures funds, and funds of hedge funds, private equity, and managed futures funds, are speculative and entail significant risks that can include losses due to leveraging or\other speculative investment practices, lack of liquidity, volatility of returns, restrictions on transferring interests in a fund, potential lack of diversification, absence and/or delay of information regarding valuations and pricing, complex tax structures and delays in tax reporting, less regulation and higher fees than mutual funds and risks associated with the operations, personnel and processes of the advisor. Master Limited Partnerships (MLPs) are limited partnerships or limited liability companies that are taxed as partnerships and whose interests (limited partnership units or limited liability company units) are traded on securities exchanges like shares of common stock. Currently, most MLPs operate in the energy, natural resources or real estate sectors. Investments in MLP interests are subject to the risks generally applicable to companies in the energy and natural resources sectors, including commodity pricing risk, supply and demand risk, depletion risk and exploration risk; and MLP interests in the real estate sector are subject to special risks, including interest rate and property value fluctuations, as well as risks related to general and economic conditions. Because of their narrow focus, MLPs maintain exposure to price volatility of commodities and/or underlying assets and tend to be more volatile than investments that diversify across many sectors and companies. MLPs are also subject to additional risks including: investors having limited control and rights to vote on matters affecting the MLP, limited access to capital, cash flow risk, lack of liquidity, dilution risk, conflict of interests, and limited call rights related to acquisitions. Mortgage backed securities also involve prepayment risk, in that faster or slower prepayments than expected on underlying mortgage loans can dramatically alter the yield -to -maturity of a mortgage -backed security and prepayment risk includes the possibility that a fund may invest the proceeds at generally lower interest rates. Tax managed funds may not meet their objective of being tax -efficient. Real estate investments are subject to special risks, including interest rate and property value fluctuations, as well as risks related to general and economic conditions. High yield fixed income securities, also known as "junk bonds", are considered speculative, involve greater risk of default and tend to be more volatile than investment grade fixed income securities. Credit quality is a measure of a bond issuer's creditworthiness, or ability to repay interest and principal to bondholders in a timely manner. The credit ratings shown are based on security rating as provided by Standard & Poor's, Moody's and/or Fitch, as applicable. Credit ratings are issued by the rating agencies for the underlying securities in the fund and not the fund itself, and the credit quality of the securities in the fund does not represent the stability or safety of the fund. Credit ratings shown range from AAA, being the highest, to D, being the lowest based on S&P and Fitch's classification (the equivalent of Aaa and C, respectively, by Moody(s). Ratings of BBB or higher by S&P and Fitch (Baa or higher by Moody's) are considered to be investment grade -quality securities. If two or more of the agencies have assigned different ratings to a security, the highest rating is applied. Securities that are not rated by all three agencies are listed as "NR". "Alpha tilt strategies comprise a core holding of stocks that mimic a benchmark type index such as the S&P 500 to which additional securities are added to help tilt the fund toward potentially outperforming the market in an effort to enhance overall investment returns. Tilt strategies are subject to significant timing risk and could potentially expose investors to extended periods of underperformance." Custom Account Index: The Custom Account Index is an investment benchmark based on your historical target allocations and/or manager selection that you may use to evaluate the performance of your account. The Custom Account index does take into consideration certain changes that may have occurred in your portfolio since the inception of your account, i.e., asset class and/or manager changes. However, in some circumstances, it may not be an appropriate benchmark for use with your specific account composition. 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Although MMFs classified as government funds (i.e., MMFs that invest 99.5% of total assets in cash and/or securities backed by the U.S government) and retail funds (i.e., MMFs open to natural person investors only) seek to preserve value at $1.00 per share, they cannot guarantee they will do so. The price of other MMFs will fluctuate and when you sell shares they may be worth more or less than originally paid. MMFs may impose a fee upon sale or temporarily suspend sales if liquidity falls below required minimums. During suspensions, shares would not be available for purchases, withdrawals, check writing or ATM debits. A MMF investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or other government agency. Nwfts ww�i Sebastian Police Officers' Pension Fund Investment Review Period Ending September 30, 2020 Hiland Capital MANAGEMENT, LLC An Argent Company H and Capital MANAGEMENT, LLC An Argent Company This page intentionally left blank. Sebastian Police Officers' Pension Fund Table of • Commentary Page 1 Total Return Summary and Portfolio Allocation Page 11 Performance Returns for Various Periods Page 12 Equity Sector Allocation and Returns Page 13 Top Ten Holdings Page 15 International ADR Country Allocation Page 17 Fixed Income Characteristics Page 18 Portfolio Holdings Page 22 Purchases and Sales Page 34 Period Ending 9/30/2020 Hi bland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund 3Q20 Equity Commentary Period Ending 9/30/2020 The third quarter of 2020 saw the market post a solid return of the midst of large companies (i.e. Disney, the airlines, Citigroup, etc..) 8.9%, even after suffering the worst September in a decade (S&P starting to announce job cuts that will impact higher wage earners corrected 10% from the highs reached on September 2nd). After a who will likely find it harder to find equivalent employment. The rough Q1 in the markets, the Q2 and Q3 of 2020 registered the best broader unemployment category U6 (includes those who are working back to back two quarter performance for the S&P since 2009, with part time, or who are not technically in labor force but would like to the S&P gaining over 31% since the end of March. NASDAQ has far and away been the biggest winner of 2020, with the index posting a gain of 25.3%. For the YTD the S&P has now gained 5.5%. The third quarter market action was positive with better sentiment as encouraging vaccine news, improving economic data, and the expectation of continuing government support helped to buoy the markets. We would attribute the downward move from the highs of September 2nd to a realization that another fiscal stimulus plan from congress could possibly be delayed until after the election, a resurgence of Covid cases in continental Europe and parts of the US, profit taking (primarily in the tech sector), and some flattening in the jobs data. In what has been the strangest year that any of us have lived through, market returns have been better than we would have expected. Credit is due to the quick actions taken by the Fed early in the pandemic to provide ample liquidity to markets (M2 money supply up 23% year over year), and to Congress for passing fiscal packages that provided aid to the unemployed and small business. The unemployment rate has declined from a high of 14.7% in April to 7.9% at present. Part of the recent drop is due to an unfavorable decline in the Labor Force Participation Rate to 61.4%. The easy part of the jobs recovery has been achieved. Lowering the unemployment rate from here will be tougher. Small business was the first to be impacted and layoffs occurred quickly. We are now in work) fell to 12.8% in September from 14.2% in August. Third Quarter Market Recap: The S&P returned 8.9% in Q3, with some sector rotation from the previously top performing groups. Tech, which has consistently been the leader in 2020, was the fourth best performing group for the quarter gaining 12%. In a nod to an improving economy and perhaps the beginning of a new cycle, early cycle sectors performed best with Consumer Discretionary adding 15.1%, Materials 13.3, and Industrials 12.5%. FeclEx was a top performer in Q3 delivering (pun intended) a return of 79%. Another transport stock, CSX railroad, was also a top performing Industrial name gaining over 11%. Homebuilder Lennar Corp within the Consumer Discretionary space added almost 33% as low interest rates continue to fuel the strong residential real estate market. Within Materials, improving copper prices (directly tied to better economic numbers) and higher gold prices led to Freeport McMoran gaining 35%. Lagging sectors for the quarter continued to be Energy (-19.7%), Real Estate (+1.9%), and Financials (+4.4%). Crude oil was up 2.4% in the quarter, but energy markets continue to worry about depressed demand due to Covid (primarily air travel), and the impacts that a second wave could have on demand. Real Estate is also a Covid casualty as the work from home concept has negative implications for commercial office real estate, and the accelerated shift to online purchasing continues to impact the retail segment. In 2020 we have experienced the fastest move from a bull market into a bear market (occurred in March), then subsequently the shortest bear market on record, and now likely the shortest recession. As such, we could start to see some Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund 3Q20 Equity Commentary shift in sector performance and would welcome that, but we would still expect Tech to remain solid, especially if the recovery is jagged. While growth stocks have continued to outperform value on a YTD basis, we did see a brief respite in that trend in September, with the Russell 1000 Growth index falling 4.8% for the month, while the Russell 1000 Value index fell by 2.6%. While growth has outperformed value for the better part of a decade, value does tend to outperform after a recession ends. What can we expect in the months ahead? As much as we hate to admit it, the virus will continue to dictate the trajectory of the economic recovery. We would rule out any kind of national "lock down" going forward as the consequences are too severe, but a resurgence of Covid could certainly impact consumer habits in areas experiencing an outbreak. We expect a slow grind forward with the economy continuing to recover, but at a much more subdued pace after a sharp bounce in Q3 GDP (Atlanta Fed projects 32%). For the next few quarters, we expect GDP in the 3 — 5% range. Whether or not another stimulus package is passed before or after the election, we do see this as something that the economy needs. The recent slowdown in new job creation emphasizes that point. We would anticipate another $1.5 - $2 trillion package will be necessary to provide additional unemployment benefits, aid to state and local governments, and some form of housing assistance for those in mortgage forbearance programs due to job loss. been to provide a bridge to span the gap of lost income until an effective vaccine can allow normal activities to resume. We expect that by late spring or early summer of 2021 we could reach that point, or at least be within shouting distance. The added debt burden that has been incurred as a result of stimulus could have longer term impacts on the US dollar and inflation. The dollar is down 5% YTD, and down almost 6% over the past Period Ending 9/30/2020 three months. A weaker dollar is inflationary for the US consumer but is also an advantage for larger US companies that sell products internationally, as the weaker dollar makes their goods more price competitive. The election adds another layer of uncertainty regarding potential policy changes impacting regulation, taxes, climate, trade, infrastructure, and antitrust. Seasonality is not great historically in the third quarter, with the market on average gaining 1.4%, and with the uncertainty of an election looming, volatility should increase. Is there further upside likely? We suspect gains from these levels will be minimal. The market in our opinion has already priced in good progress on the vaccine front, the Fed has been more than generous, and valuations are mildly stretched. Further stimulus is needed, and while it's not certain, the market has probably priced into some degree that Congress will act. The next driver for the market will need to be a recovery in earnings, and that is hopefully more visible as we move deeper into 2021. It will probably take until 2022 to recapture the aggregate earnings level achieved in 2019. Valuation: The market continues to exhibit valuation levels that are above the historical averages, with the current multiple at 20.9X forward 12- month earnings, versus the five-year average of 17.2X and the 10-year average of 15.4X. With weak earnings, most investors have been relying on easy monetary policy and fiscal stimulus to bridge the "covid gap," and get the market back to a positive earnings trajectory in 2021. In effect, 2020 has The job of central bankers and policy makers has been viewed as a throw away year for earnings, and company target prices have been forecasted based on normalized earnings in 2021 and 2022. To put valuation in some historical perspective, during the "Nifty Fifty" era of the early'70's the top 50 names had a median valuation multiple of 41.1X earnings. The more recent "Tech Bubble" at the end of the 90's had a median multiple of 33.6X earnings. In comparison, today's top 50 names have a multiple of 30.3X earnings. So while there are similarities to the late Hi Wand Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund 3Q2O Equity Commentary Period Ending 9/30/2020 90's with technology being the rage, and initial public offerings The pandemic is not over, but if we put things into a baseball being highly anticipated and well received even when companies analogy, we would guess that we are now in the middle innings. have limited prospects for profits in the foreseeable future, today's Scientists and doctors know much more today than they did in valuation levels have not quite reached the same lofty levels. January, and progress is being made. There are still challenges to Today's valuations are also supported by the lowest interest rates on record which increase the present value of future cash flows. However, it seems as though the market has been forgiving in meet with the seasonal flu and winter coming, but we are hopeful that by this time next year we can speak of the pandemic in the past tense. We hope that you will all continue to stay well and encourage allowing that the economy will recover and get back on track in you to reach out with any questions you might have regarding your 2021. As mentioned in previous notes, there is a wide disparity portfolios. We thank you for your trust and confidence. between the market and the economy at present. If the timing of the anticipated recovery falters, and if unemployment remains stubbornly high, then earnings will not recover as anticipated, and the market would likely see valuations compress. For the Q3 of 2021 earnings are expected to decline by 21.2%, and the fourth quarter is expected to see a decline of 12.7%. Full year 2020 earnings should be down 18%. We should finally see a positive earnings quarter in Q1 of 2021 with earnings rising 12.8%, and if the recovery materializes, 2021 eps will grow by 26% over the weak comparison of 2020. Highland Capital MANAGEMENT, LLC An ArgentCompany Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 3Q20 Large Cap Value Equity Commentary Where has all the value gone? As one will see in reading this piece it's not just the theme of Growth versus value as a whole, but it can be broken down further into individual sectors as we will point out. Our large cap value quarterly returns slightly lagged the market advance largely due to our overweighting in energy which was the only negative returning sector. This was a complete reversal of the previous quarter where energy led the way. Our modelling was strong in individual stock selection however, particularly in the info tech, Industrial and Consumer Discretionary sectors Growth Style investing continued its epic run versus Value Style as seen below in our chart. Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 3Q20 Large Cap Value Equity Commentary In reviewing the comparable style boxes and returns below, we can see the tremendous spread between not only value versus growth but cap weights too. For the YTD and since market peak small cap value has been the worst asset class to be in trailing the next worse asset classes by nearly 8%. Value Blend Growth Large -11.60% 5.60% 24.30% Mid -12.80% -2.30% 13.90% Small -21.50% -8.70% 3.90% Since market peak (February 19, 2020) Value Blend Growth Large -12.60% 5.00% 13.80% Mid -14.30% -5.90% 6.50% Small -19.90% -10.10% -1.20% Since market low (March 23, 20201 Value Blend Growth Large 41.30% 51.70% 66.00% Mid 51.40% 57.50% 65.60% Small 40.90% 51.50% 60.60% (Source: FactSet, Russell Investment Group, Standard & Poor's & J.P. Morgan Asset Management guide to the markets) Hnhland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 3Q20 Large Cap Value Equity Commentary Taking a deeper dive into sector returns confirms that what is happening is a rotation out of Value and into Growth style portfolios as seen here. Sector Returns by Style - Q2 2020 ENERGY TECHNOLOGY TELECOM FINANCIALS UTILITIES CONSUMER STAPLES HEALTH CARE INDUSTRIALS BASIC MATERIALS CONSUMER DISCRETIONARY -30% 7 -2C% -10% 0% 10% 20% R1000 Growth ■ R1000 Value 30% 7 40t%,. As one can see above, it was extremely profitable to be an Energy investor to a Growth manager (+35% QTD), but the opposite to the Value manager (- 20% QTD), suggesting what is happening is not likely to be specific to the Energy industry as a whole. A similar pattern is seen in Utilities, where Value style investors enjoyed a 5% advance, in contrast to Growth style managers who suffered a 9% loss. Likewise, Telecommunications was profitable to a Value manager (3% QTD) but a loss to a Growth manager (-14%). So it's an oversimplification to conclude that, "Tech's the place to be" and, "Energy can't find a bottom". It depends on if you're talking to a Value or Growth style manager. Where do we go from here? Until the market begins to think of cheap valuation as an opportunity and not folly, it's hard to be bullish on the index. Nonetheless, our modeling is still showing opportunity in Financials and Healthcare and is showing weakness in Real Estate and Communication Services. We have added some new names to the portfolio as they just entered our universe and have been ranking high in our model including Boeing and EA Sports. We are here to assist you in any way and to answer your questions. We appreciate the opportunity to serve you and value the trust and confidence that you have placed in us. Stay safe and well. Highland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 3Q20 Large Cap Growth Equity Commentary Markets continued their advance during the third quarter, with the Russell 1000 Growth Index up another 13.2%. Investors continue to look past near - term headwinds; focusing on better than expected economic data, positive news on vaccines and therapeutics to combat the coronavirus, and the expectation for more fiscal stimulus in combination with an extremely aggressive Federal Reserve. We did see some sector rotation throughout the quarter; where more cyclical sectors outperformed. Consumer Discretionary, Materials, and Industrials all had strong quarters; gaining 20.6%, 15.0%, and 13.4% respectively. Information Technology continued to do well, up 14.9% and the third best sector. Energy and Utilities lagged, losing 4% and 4.75%. Factor Performance Factor Performance was once again choppy throughout the quarter. Factor trends didn't truly emerge until late August/early September. Growth ultimately ended up performing well, ramping in September. Value saw the opposite, selling off during the quarter's final month. Net, this was a benefit to our portfolio performance during the quarter. Momentum finished the quarter roughly flat, ramping during September after falling behind in the previous month. Large market cap exposure helped during the quarter and was one of the more consistent factors during Q3. Q3 Generic Factor Performance a 6 4 2 O _2 _4 -6 _g ,ti ,, ,ti0 ,LO 1 ,ti0 ,ti0 .�0 ,10 '40 ,ti0 ,yo .ti0 ,LD ,ti0 0 ,LO ; "L ,y0 ,LO .y0- "L ,40- 'V- ,y0 .LO "ti ,y; \ �1, 01,Fl 011F, 01\" 01,11, 0�, 01,�0, 0p� 0-I.\" 10", 01-KI, O$,,0, d°,,Fl 01l IZO'e,11, Growth Value Momentum Market Cap �Hnhland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund 3Q20 Large Cap Growth Equity Commentary Period Ending 9/30/2020 Our Approach During Q3 Revisiting a theme from our last quarterly note, the Russell 1000 Growth was strongest in Industrials, Information Technology, and Health Care. The Index underwent one of the more extreme reconstitutions we've main allocation headwind during the quarter cash drag; costing 25bps. witnessed on June 29th. A quick recap: 173 securities removed, 72 new Though we wouldn't classify cash levels as particularly elevated, another names added. Of the 72 new securities, the majority were Technology and strong quarter for the index made any level of cash a factor. Health Care names, smaller on the market cap scale, and traded at an average 1Y Forward Price to Sales Ratio of 16.4x. Overnight, our targeted factor exposures were largely dismantled. After the second quarter's 27.8% return and the index rebalance, we approached the third quarter with additional caution. Within our quantitative process, we tilted to minimize excess exposure to nose -bleed valuations and tactically repositioned the portfolio when opportunities arose. We reduced our Q2 overweight in technology and software to a slight underweight and added to industrials. We maintained a lower tracking error in third Highland Large Cap Growth Performance Large Cap Growth performed in -line with the index, during what we believe was a difficult quarter for active management. Breadth was extremely narrow, with only 35% of index constituents outperforming the benchmark. Well below historical averages. Breadth gets even worse when evaluating key sectors. Within information technology, by far the largest sector in the index, only 29% of securities outperformed the benchmark. Software, despite high profile outperformance from companies like Zoom, was even worse with just 27% of companies outperforming the Russell 1000 Growth Index. Our move to tilt away from high valuation names, particularly in technology, was a net benefit to performance. Our quantitative process benefitted from strong security selection which was partially offset by weaker allocation attribution. Security selection was Outlook We believe the fourth quarter will come with added volatility, particularly around the election and continuous flow of COVID-19 news. We will use any downside volatility as an opportunity to get more aggressive. Ultimately, we believe the Growth Index will continue to be a net beneficiary from trends accelerated due to the coronavirus, with the added tailwind of accommodative fiscal and monetary policy. We will continue to exercise caution around extreme valuations when constructing the portfolio. Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 3Q20 Fixed Income Portfolio Manager Commentary The Federal Reserve has kept the same playbook since the economy caused by the pandemic. Similar to the Federal Reserve, ECB was forced to shut down earlier this year. The Fed has signaled to President Christine Lagarde made the case for changing ECB policy to market participants ultra -accommodation until a vaccine is in place allow inflation to run above 2%. The last time the ECB raised rates and growth/inflation resume to pre-COVID levels. On September was in 2011 (in response to a bout of energy inflation). 16th, the Federal Reserve delivered another dovish message to the market. The Fed left interest rates on hold and stated short term rates would be near zero for the next several years. We can continue to expect accommodation from the Federal Reserve, until the average rate of inflation is well in excess of 2%. The Fed will continue buying Treasuries and mortgages in order to make sure the market is functioning properly. The housing market has benefited from low rates, as the 30 year fixed mortgage index set an all-time low in September. It appears the Fed is ready to ramp up asset purchases should the economy slow, or inflation remains well below the target of 2%. For the time being, it appears the Fed has ruled out negative interest rates except under the most extreme circumstances. Additionally, the Federal Reserve is getting pressure from Congress to address income inequality. Certain members on the Fed have recently acknowledged increasing short term interest rates might harm lower wage workers disproportional ly. The forceful language and continued expansion of asset purchases has driven Treasury volatility to the lowest level on record (a metric with over 33 years' worth of data). Global central bankers are also Corporate credit risk slightly underperformed Treasuries in September as the market appears concerned about: the next Supreme court judge, the timing of another fiscal package from Congress and the ongoing talk of a potential contested election. The third quarter generated another positive rate of return for the bond market after interest rates traded in a narrow range during the last three months. The vast majority of the gains came in July (both August and September generated negative total return). Credit spreads and investment grade have benefited from consistent inflows from mutual funds (24 straight weeks as of September 28th). The 10-year Treasury ended the quarter yielding 0.69%, a small increase of 3 basis points since June 30th. The Bloomberg Barclays Aggregate increased 0.62% during the quarter bringing year-to-date performance to 6.79%. The Bloomberg Barclays Intermediate US Gov/Credit index increased 0.61% during the quarter bringing year-to-date performance to 5.92%. The trailing 12-month global default rate edged up to 6.4% at the end of August, from 6.2% in July. The latest reading marked the highest default rate in a decade. The second quarter of 2020 was the second highest number of defaults in a single quarter behind only the first quarter of 2009. 53% of the making sure cheap money is available for the foreseeable future. defaults were comprised from two sectors (Consumer/Service and The Bank of England is even considering cutting interest rates below Energy). zero as the country faces uncertainty from government restrictions Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund 3Q20 Fixed Income Portfolio Manager Commentary As of early September, corporate bond issuance has already surpassed the previous annual record set in 2017. The new issue market has remained healthy after the volatility experienced in March. Companies have responded to the economic uncertainty by building liquidity to shore up balance sheets in light of expected material revenue declines. Companies have also reduced cash outlays as a revenue offset. Buybacks and dividends of US large companies are down this year, stock buybacks are down 21% year over year as of the first half of 2020. Additionally, capital expenditures are down 7% year over year. As a consequence, gross and net leverage is up for companies this year. Companies hardest hit by the pandemic have been pushed to secure bond deals pledged against their assets (i.e. planes, routes, ships, etc.). Similar to the Treasury market, the corporate bond market has acted surprisingly calm over the past several months and trading in a very tight range. Corporate issuance is expected to slow down after the Presidential election. Period Ending 9/30/2020 The risk to interest rates going forward will obviously be driven by the level of accommodation supplied by the Federal Reserve. Should the Federal Reserve reduce monthly asset purchases the market should expect heightened volatility and a path to marginally higher interest rates. US interest rates continue to face competitive pressure as international buyers are confronted with negative interest rates. The path to higher rates won't happen until we have an adopted COVID vaccine, sustained global growth and hints of inflation picking up. 10 Hnhland Capital MANAGEMENT, LLC An Argent Compary Sebastian Police Officers' Pension Fund Total Return Summary Quarter $12,077,349 $12,902,100 $824,752 (7/1/20 - 9/30/20) Fiscal Year to Date (10/1/19 - 9/30/20) $11,665,527 $12,902,100 $1,236,573 Five Year (10/1/15 - 9/30/20) $11,288,678 $12,902,100 $1,613,423 Period Ending 9/30/2020 $385,000 -$324,556 $764,308 6.34% $389,117 -$367,623 $1,215,078 10.46% $5,733,784 -$9,235,381 $5,115,020 54.10% Asset Allocation o Cash u Value u Growth u International J Fixed Income 9.03 % o Cash o Value V Growth u International Fixed Income Cash $722,683 6.0% Cash $864,259 6.7% Value $2,998,120 24.8% Value $3,260,594 25.3% Growth $4,012,022 33.2% Growth $4,320,367 33.5% International $670,541 5.6% International $719,040 5.6% Fixed Income $3,673,983 30.4% Fixed Income $3,737,839 29.0% Hihlmd Capital 11 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Performance Returns for Various Periods 0% 5% 10% 15% -20% 0% 20% 40% Total Total / Value Value o Growth Growth International I International I Jp Fixed Income Fixed Incomerl J Total Value Growth International Fixed Income Period Ending 9/30/2020 0% 10% 20% 30% Total Quarter 1 • 1 1 6.34% 1 • • 1 1 10.46% 1 • 1 1 9.03% Total Benchmark 5.44% 11.02% 9.19% Value R1000V 4.57% 5.59% -7.02% -5.04% 6.91% 7.64% Growth 13.04% 34.70% 17.07% R1000G 13.22 % 37.53 % 20.10% International MSCI EAFE MSCI ACWI ex US 7.58% 4.87% 6.21% 0.47% 1.01% 3.00% 5.24% 5.78% 6.23% Fixed Income 1.18% 6.82% 4.53% * BBCAG 0.62 % 6.98 % 4.18 % *BBCGC 0.78% 8.03% 4.66% *Source: Bl000mberg Index Services Limited Hi 9land Capital 12 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Domestic Equity Sector Allocation vs. R1000V 25% 21.4 20% 15%----------- 10% 5% ---4.0 4.0 ---- 0% ____w 18.1 Period Ending 9/30/2020 ENERGY MATERIALS INDUSTRIALS CONS. CONSUMER HEALTH CARE FINANCIALS INFO. TECH. COMM. SERV. UTILITIES REAL ESTATE DISCRETION STAPLES Domestic Equity Quarterly Sector Returns vs. R1000V 25% T------------------•--------------- ----------------------------- 18.3 20%-L------------------ •---- ------------------ ---------------------------------------------------------------------- I------------------- 15% �------------------ •-------- 12.0 --- --- 11.7 t11.5 --- --- ---- •------------------ •------------------ --------- —---------------------------- —------------- ----- •------------------------------------• 10% ---- - -- ---- -- 7.3 •- - - - - - - 7.1 7.1 --- - - - — ---------------- 7.3 8.4 - -- --- ---------------•---- 3.9 --- --- 3.8 --- --------- I _--__-- 2.2 __ 4.8 5. 0% ----------------- •------------------ ------------------- ----------------- ------------------- ------------------- -25%19.5 ENERGY MATERIALS INDUSTRIALS CONS. CONSUMER HEALTH CARE FINANCIALS INFO. TECH. COMM. SERV. UTILITIES REAL ESTATE DISCRETION STAPLES o Account u R1000V Hi 9land Capital 13 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Domestic Equity Sector Allocation vs. R1000G 50% 45%4.5 44.3 4 ------------------------------------ 40% ---------------------------- ---------------------------- 35% ------------------------------- 30% ---------------------------------------------------------- 25% ----------------------------------------------- 20% --------------- 16.6 16.5-------------- 15.8------------ 15%----------------------------------------------- ----------- 12.2 30.9 ----------- 10% ----------------------------------- 4.2 4.6 4.3 4.8-------- 5%--------------------------------------_------ ---- ---- - 2.0- -- - -- - -- -- -- 1.4 1.8 0.0 0.1 0.3 0.8 0.9 0.0 0.0 0% t a ENERGY MATERIALS INDUSTRIALS CONS. CONSUMER HEALTH CARE FINANCIALS INFO. TECH. COMM. SERV. UTILITIES REAL ESTATE DISCRETION STAPLES Domestic Equity Quarterly Sector Returns vs. R1000G 2 5% r------------------•---------- ----------------------------------- 20.3 19.3 20.3 20.7 15.1 15.0 16.2 15% - ------------------ -- 13.4 12.2 ------------------------------- - - - ----- ------------------------ ------------------ 10.2 - ----- - --- , 8.2---•------------------------------------- in - 5.3 ' 1.0 --- 0.0 0.0 0% i o � ---------------------------- w ---- --- ]a --------- -4.0 -4.8 -5.3 -10%1--------------------------------------------------------------------- ENERGY MATERIALS INDUSTRIALS CONS. CONSUMER HEALTH CARE FINANCIALS INFO. TECH. COMM. SERV. UTILITIES REAL ESTATE DISCRETION STAPLES o Account u R1000G Hi 9land Capital 14 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Top Ten Domestic Equity Holdings wTOP TEN HOLDINGS V OTHER HOLDINGS Security Weight APPLE INC 6.28 27.27 MICROSOFT CORP 5.64 3.71 AMAZON COM INC 4.23 14.31 BERKSHIRE HATHAWAY INC 2.21 19.29 FACEBOOK INC 2.18 15.33 HOME DEPOT INC 1.97 11.42 JOHN50N & JOHNSON 1.81 6.60 VISA INC 1.66 3.83 ALPHABET INC 1.60 3.59 MASTERCARD INC 1.59 14.84 82.87 w TOP TEN HOLDINGS LfOTHER HOLDINGS Security Weight % BERKSHIRE HATHAWAY INC-CL B 2.75 19.29 JOHNSON &JOHNSON 2.29 6.57 JP MORGAN CHASE & CO 1.97 3.34 VERIZON COMMUNICATIONS 1.66 9.14 WALT DISNEY CO/THE 1.51 11.27 INTEL CORP 1.48 -12.87 COMCAST CORP-CLASS A 1.41 18.68 PFIZER 1.38 13.33 AT&T INC 1.37 -4.03 WALMART INC 1.31 17.28 Period Ending 9/30/2020 w TOP TEN HOLDINGS LJOTHER HOLDINGS Security Weight % APPLE INC 11.31 27.22 Microsoft corp 9.53 3.60 AMAZON.COM INC 8.08 14.13 FACEBOOK INC-A 3.81 15.34 ALPHABET INC-CLA 2.07 3.35 ALPHABET INC-CL C 2.04 3.96 VISA INC-CLASS A SHARES 2.04 3.68 NVIDIA CORP 1.93 42.50 TESLA INC 1.92 98.65 MASTERCARD INC-A 1.81 14.51 Hih1md Capital 15 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Top Ten International Equity Holdings NTOP TEN HOLDINGS LJOTHER HOLDINGS 87.14 NTOP TEN HOLDINGS LJ OTHER HOLDINGS MTOP TEN HOLDINGS V OTHER HOLDINGS SONY CORP AMER SH NEW ADR 7.73 11.02 NESTLE 2.59 7.98 ALIBABA GROUP HLDG ADR 2.58 STMICROELECTRONICS NV -NY SHS 6.23 12.10 ROCHE HOLDING GENUSS 1.76 -1.31 TENCENT HOLDINGS LI 1.76 BROADCOM LTD 6.14 16.42 NOVARTIS 1.41 -0.44 TAIWAN SEMICONDUCTOR MI 1.72 SIEMENS AG SPONS ADR 5.27 18.07 SAP 1.19 11.29 NESTLE 1.65 KONINKLIJKE PHILIPS ELECTRS N V SPOT 4.81 2.70 ASML HOLDINGS 1.15 0.34 ROCHE HOLDING GENUSS 1.12 SAP SE 4.45 11.29 ASTRAZENECA 1.05 4.45 SAMSUNG ELECTRONICS CO 1.11 GLAXOSMITHKLINE PLC ADR 4.03 -6.65 TOYOTA MOTOR CORP 1.02 5.42 NOVARTIS 0.90 KYOCERA CORP 4.01 6.48 LVMH MOET HENNESSY 0.95 7.26 SAP 0.76 HITACHI LIMITED 3.88 7.41 NOVO NORDISK B 0.87 6.87 ASML HLDG 0.73 TAIWAN SEMICONDUCTOR MFG 2.90 43.61 AIA GROUP 0.87 7.02 ASTRAZENECA 0.67 5.70 42.56 7.89 -1.31 13.23 -0.44 11.29 0.34 V 4.45 Hi 9land Capital 16 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund International Equity Country Allocation 0.0% 5.0% 10.0% 15.0% BELGIUM 2.7% BERMUDA J 0.5% BRAZIL J 0.8% CANADA 1.6% CHINA 8.4% GERMANY IRELAND 3.0% JAPAN LIBERIA 2.3% LUXEMBOURG 0.397 NETHERLANDS NORWAY i 0.3% PANAMA Id 0.5% SWEDEN 6.0% SWITZERLAND 4.0 0 TAIWAN 2.8% UNITED KINGDOM UNITED STATES 5.1% EMG.MARKETS 2.1% CASH 0.8% 9.9 % 13.4% 14.1% Period Ending 9/30/2020 20.0% 21.3% 25.0% Hi 9land Capital 17 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund *Source: Bloomberg Index Services Limited Fixed Income Sector Allocation Yield: 2.46% Fixed Income Portfolio Bloomberg Barclays Capital Government/Credit Index o Corporate Bonds V US Treasuries L! Gov't Sponsored a Mortgage Pools V Corporate Bonds L! US Treasuries 'Other J Gov't Sponsored Corporate Bonds 42.5% Corporate Bonds 38.6% US Treasuries 1.3% US Treasuries 52.5% Gov't Sponsored 5.0% Gov't Sponsored 8.9% Mortgage Pools 45.3% Total 100% Other 5.9% Period Ending 9/30/2020 Yield: 2.63% Bloomberg Barclays Capital Aggregate Index o Corporate Bonds lu US Treasuries L! Gov't Sponsored u CMBS ABS J US MBS Corporate Bonds 27.3% US Treasuries 37.1% Gov't Sponsored 6.3% CMBS 2.2% ABS 0.3% US MBS 26.8% Other AIIIIIIIIIIII 0.0% Total 00 Hi 9land Capital 18 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Source: Bloomberg Index Services Limited Fixed Income Portfolio o Aaa LJ Aa A Baa Other Aaa 55.8% Aa 10.9% A 23.5% Baa 1.6% Other Total00 8.1% , Bond Quality Allocation Bloomberg Barclays Capital Government/Credit Index Aaa Aa A Baa Other Aaa 57.8% Aa 4.7% A 17.1% Baa 20.5% Other Total00 0.0% , im Period Ending 9/30/2020 Bloomberg Barclays Capital Aggregate Index ® Aaa Aa A Baa Other Aaa 69.9% Aa 3.5% A 12.2% Baa 14.5% Other Total00 0.0% , Hi bland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Source: Bloomber Index Services Limited Bond Maturity Allocation Average Maturity: 13.25 Years Average Maturity: 9.97 Years Average Maturity: 8.18 Years Fixed Income Portfolio Bloomberg Barclays Capital Bloomberg Barclays Government/Credit Index Capital Aggregate Index o <3 Yrs t! 3-5 Yrs u 5-7 Yrs o <3 Yrs V 3-5 Yrs u 5-7 Yrs o <3 Yrs u 3-5 Yrs u 5-7 Yrs u 7-10 Yrs J >10 Yrs J 7-10 Yrs J >10 Yrs J 7-10 Yrs J >10 Yrs 18.4% <3 Yrs 26.1% <3 Yrs <3 Yrs 24.4% 3-5 Yrs 9.0% 3-5 Yrs 20.3% 3-5 Yrs 34.6% 5-7 Yrs 16.8% 5-7 Yrs 12.9% 5-7 Yrs 11.4% 7-10 Yrs 9.4% 7-10 Yrs 12.6% 7-10 Yrs 9.6% >10 Yrs 46.4% >10 Yrs 28.1% >10 Yrs 19.9% Total00 00 00, Hihlmd Capital 20 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Source: Bloomberg Index Services Limited Fixed Income Portfolio o <3 Yrs N 3-5 Yrs u 5-7 Yrs J 7-10 Yrs J >10 Yrs <3 Yrs 41.1% 3-5 Yrs 20.8% 5-7 Yrs 15.8% 7-10 Yrs 5.7 % >10 Yrs Total00 16.5% , Duration Allocation Bloomberg Barclays Capital Gov/Credit Index o <3 Yrs W 3-5 Yrs a 5-7 Yrs J 7-10 Yrs J >10 Yrs <3 Yrs 27.9% 3-5 Yrs 21.4% 5-7 Yrs 14.4% 7-10 Yrs 9.9% >10 Yrs Total00 26.4% , 1.8% Portfolio Duration vs. Index Duration (Ratio) 1.4% 1.0% 0.6% 9/30/2018 12/31/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019 21 Period Ending 9/30/2020 Bloomberg Barclays Capital Aggregate Index o <3 Yrs L! 3-5 Yrs a 5-7 Yrs u 7-10 Yrs J >10 Yrs <3 Yrs 40.0% 3-5 Yrs 22.9% 5-7 Yrs 10.9% 7-10 Yrs 7.5% >10 Yrs Total00 18.7% , Index Acct 3/31/2020 6/30/2020 9/30/2020 �Hnhland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Portfolio Holdings CASH AND EQUIVALENTS (USD) CASH 864,259.30 864,259.30 6.7 1.7 COMMON STOCK (USD) Energy 741 CHEVRON CORP 113.90 84,400.88 72.00 53,352.00 0.4 7.2 660 CONOCOPHILLIPS 55.27 36,477.78 32.84 21,674.40 0.2 5.1 1165 EXXON MOBIL CORP 85.05 99,084.06 34.33 39,994.45 0.3 10.1 2040 MARATHON OIL CORP 24.48 49,946.95 4.09 8,343.60 0.1 0.0 490 MURPHY OIL CORP 46.17 22,625.60 8.92 4,370.80 0.0 5.6 400 OCCIDENTAL PETE CORP DEL 68.18 ------------------------------------------------------------------------- 27,271.21 10.01 4,004.00 0.0 0.4 319,806.50 131,739.30 1.0 7.0 Materials 198 CORTEVA INC 36.03 7,134.48 28.81 5,704.38 0.0 1.8 98 DUPONT DE NEMOURS INC 80.31 7,870.23 55.48 5,437.04 0.0 2.2 450 EASTMAN CHEMICAL CO 83.28 37,475.37 78.12 35,154.00 0.3 2.6 1745 GRAPHIC PACKAGING HOLDING CO 12.87 22,458.17 14.09 24,587.05 0.2 2.1 440 LYONDELLBASELL INDUSTRIES N V 92.61 40,749.64 70.49 31,015.60 0.2 6.0 350 NEWMONT MINING CORPORATION 63.85 22,346.84 63.45 22,207.50 0.2 1.6 950 OLIN CORP 18.38 17,456.35 12.38 11,761.00 0.1 6.5 20 SHERWIN WILLIAMS CO 583.34 ------------------------------------------------------------------------- 11,666.80 696.74 13,934.80 0.1 0.8 167,157.90 149,801.40 1.2 3.2 Industrials 449 AXON ENTERPRISE INC 79.64 35,759.53 90.70 40,724.30 0.3 0.0 300 BOEING CO 165.12 49,535.34 165.26 49,578.00 0.4 0.0 275 CARRIER GLOBAL CORP 21.45 5,898.59 30.54 8,398.50 0.1 1.0 200 CATERPILLAR INC DEL 117.70 23,539.36 149.15 29,830.00 0.2 2.8 200 CUMMINS INC 154.48 30,895.26 211.16 42,232.00 0.3 2.5 400 EATON CORP PLC 67.47 26,987.48 102.03 40,812.00 0.3 2.9 250 FORTIVE CORP 70.36 17,590.65 76.21 19,052.50 0.1 0.4 2362 GENERAL ELEC CO 27.70 65,437.62 6.23 14,715.26 0.1 0.6 250 HONEYWELL INTL INC 154.53 38,632.08 164.61 41,152.50 0.3 2.2 60 LOCKHEED MARTIN CORP 362.81 21,768.82 383.28 22,996.80 0.2 2.5 250 NORFOLK SOUTHERN CORP 102.68 25,671.16 213.99 53,497.50 0.4 1.8 100 NORTHROP GRUMMAN CORP 293.21 29,321.47 315.49 31,549.00 0.2 1.8 22 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Portfolio Holdings 210 OSHKOSH CORP 88.86 18,660.60 73.50 15,435.00 0.1 1.6 137 OTIS WORLDWIDE CORPORATION 64.19 8,793.87 62.42 8,551.54 0.1 1.3 525 RAYTHEON TECHNOLOGIES CORP 64.56 33,892.43 57.54 30,208.50 0.2 3.3 198 UNION PACIFIC CORP 144.29 28,570.01 196.87 38,980.26 0.3 2.0 300 UNITED AIRLINES HOLDINGS INC 84.35 25,304.21 34.75 10,425.00 0.1 0.0 169 UNITED PARCEL SERVICE INC 117.94 19,931.60 166.63 28,160.47 0.2 2.4 2852 VERTIV HOLDINGS CO 13.51 38,544.21 17.32 49,396.64 0.4 12 WABTEC CORP 211.59 2,539.08 61.88 742.56 0.0 0.8 ------------ --------------------------------- 547,273.40 ----------------- 576,438.30 ----------- 4.5 1.6 Consumer Discretionary 102 AMAZON COM INC 1,295.75 132,166.60 3,148.73 321,170.50 2.5 0.0 100 CAPRI HOLDINGS LTD 34.68 3,468.17 18.00 1,800.00 0.0 0.0 376 CARMAX INC 87.04 32,728.20 91.91 34,558.16 0.3 0.0 1520 FORD MOTOR CO 12.57 19,108.26 6.66 10,123.20 0.1 0.0 805 GENERAL MOTORS CO 39.11 31,485.92 29.59 23,819.95 0.2 5.2 350 HILTON WORLDWIDE HOLDINGS INC 80.47 28,163.28 85.32 29,862.00 0.2 0.0 540 HOME DEPOT INC 213.91 115,512.30 277.71 149,963.40 1.2 2.2 1050 JOHNSON CONTROLS INTERNATIONAL PLC 28.41 29,826.09 40.85 42,892.50 0.3 2.5 900 LAS VEGAS SANDS CORP 57.18 51,458.32 46.66 41,994.00 0.3 0.0 147 LULULEMON ATHLETICA INC 314.83 46,280.32 329.37 48,417.39 0.4 0.0 323 MCDONALDS CORP 185.90 60,045.78 219.49 70,895.27 0.5 2.3 301 NIKE INC 78.96 23,768.08 125.54 37,787.54 0.3 0.8 950 PULTE GROUP INC 29.63 28,144.80 46.29 43,975.50 0.3 1.0 426 STARBUCKS CORP 71.53 30,473.52 85.92 36,601.92 0.3 1.9 400 TARGET CORP 85.54 34,214.92 157.42 62,968.00 0.5 1.7 171 TESLA MOTORS INC 161.41 27,601.31 429.01 73,360.71 0.6 0.0 681 YUM CHINA HOLDINGS INC 43.65 29,723.27 52.95 36,058.95 0.3 0.0 ------------------------------------------------------------------------- 724,169.10 1,066,249.00 8.3 0.9 Consumer Staples 784 COCA COLA CO 54.62 42,823.50 49.37 38,706.08 0.3 3.3 106 COSTCO WHOLESALE CORP 286.76 30,396.55 355.00 37,630.00 0.3 0.8 179 ESTEE LAUDER COS INC 173.06 30,977.69 218.25 39,066.75 0.3 0.9 300 INGREDION INC 93.92 28,176.90 75.68 22,704.00 0.2 3.3 800 MONDELEZ INTERNATIONAL INC 57.43 45,943.36 57.45 45,960.00 0.4 2.2 585 PEPSICO INC 129.15 75,553.09 138.60 81,081.00 0.6 3.0 23 Hihlmd Capital MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund Portfolio Holdings 600 PROCTER & GAMBLE CO 87.03 52,220.71 138.99 83,394.00 0.6 2.3 1329 SPROUTS FARMERS MARKET INC 25.10 33,360.16 20.93 27,815.97 0.2 0.0 1350 US FOODS HOLDING CORP 27.17 36,676.37 22.22 29,997.00 0.2 0.0 200 WALGREENS BOOTS ALLIANCE INC 78.63 15,726.85 35.92 7,184.00 0.1 5.2 ------------------------------------------------------------------------- 391,855.20 413,538.80 3.2 2.0 Health Care 359 ABBVIE INC 88.67 31,830.90 87.59 31,444.81 0.2 5.4 344 AMGEN INC 206.07 70,886.59 254.16 87,431.04 0.7 2.5 200 ANTHEM INC 242.57 48,513.51 268.59 53,718.00 0.4 1.4 100 BIOGEN IDEC INC 288.50 28,850.22 283.68 28,368.00 0.2 0.0 1340 BRISTOL-MYERS SQUIBB CO 50.02 67,031.53 60.29 80,788.60 0.6 3.0 130 CIGNA CORP 40.82 5,306.63 169.41 22,023.30 0.2 0.0 600 CVS HEALTH CORPORATION 55.51 33,306.18 58.40 35,040.00 0.3 3.4 233 ELI LILLY & CO 140.88 32,824.87 148.02 34,488.66 0.3 2.0 1098 EXELIXIS INC 24.99 27,439.35 24.45 26,846.10 0.2 0.0 210 HCA HEALTHCARE INC 84.22 17,686.02 124.68 26,182.80 0.2 0.0 680 HOLOGIC INC 61.73 41,977.35 66.47 45,199.60 0.4 0.0 695 HORIZON THERAPEUTICS PLC 34.50 23,979.65 77.68 53,987.60 0.4 0.0 175 INSULET CORP 180.96 31,667.69 236.59 41,403.25 0.3 0.0 926 JOHNSON & JOHNSON 137.72 127,531.70 148.88 137,862.90 1.1 2.7 200 LABRATORY CORPORATION OF AMERICA HOL[ 195.11 39,022.04 188.27 37,654.00 0.3 0.0 668 MERCK & CO INC 85.40 57,044.40 82.95 55,410.60 0.4 2.9 219 NEUROCRINE BIOSCIENCES INC 93.73 20,526.12 96.16 21,059.04 0.2 0.0 1460 PFIZER INC 35.51 51,851.07 36.70 53,582.00 0.4 4.1 240 SAREPTA THEROPEUTICS INC 159.78 38,347.44 140.43 33,703.20 0.3 0.0 355 TANDEM DIABETES CARE INC 96.38 34,213.55 113.50 40,292.50 0.3 0.0 165 THERMO FISHER SCIENTIFIC INC 306.97 50,649.36 441.52 72,850.80 0.6 0.2 289 UNITEDHEALTH GROUP INC 261.53 75,581.65 311.77 90,101.53 0.7 1.6 207 VERTEX PHARMACEUTICALS INC 230.54 --------------------- 47,721.49 ...... 272.12 ---------------------------------------------- 56,328.84 0.4 0.0 1,003,789.00 1,165,767.00 9.0 1.6 Financials 1100 AMERICAN INTERNATIONAL GROUP INC 41.93 46,119.88 27.53 30,283.00 0.2 4.6 2509 BANK OF AMERICA CORP 23.35 58,597.31 24.09 60,441.81 0.5 3.0 790 BERKSHIRE HATHAWAY INC 172.06 135,924.50 212.94 168,222.60 1.3 0.0 250 CHUBB LIMITED 145.79 36,447.35 116.12 29,030.00 0.2 2.7 Period Ending 9/30/2020 Hihlmd Capital 24 MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Portfolio Holdings 1000 CITIGROUP INC 59.37 59,371.32 43.11 43,110.00 0.3 4.7 750 CITIZENS FINANCIAL GROUP INC 36.50 27,371.40 25.28 18,960.00 0.1 6.2 150 CME GROUP INC 172.42 25,863.65 167.31 25,096.50 0.2 2.0 230 GOLDMAN SACHS GROUP INC 232.91 53,568.81 200.97 46,223.10 0.4 2.5 250 HANOVER INSURANCE GROUP 133.94 33,485.46 93.18 23,295.00 0.2 2.8 865 JP MORGAN CHASE & CO 80.24 69,404.86 96.27 83,273.55 0.6 3.7 121 LENDING TREE INC 204.17 24,704.85 306.89 37,133.69 0.3 0.0 360 LINCOLN NATL CORP IND 53.31 19,190.45 31.33 11,278.80 0.1 5.1 300 NASDAQ STK MKT INC 90.71 27,212.97 122.71 36,813.00 0.3 1.6 2640 REGIONS FINANCIAL CORP 15.19 40,105.32 11.53 30,439.20 0.2 5.4 650 TRUIST FINANCIAL CORP 44.03 28,619.48 38.05 24,732.50 0.2 4.7 885 US BANCORP 46.16 40,847.69 35.85 31,727.25 0.2 4.7 1490 WELLS FARGO CO 55.41 82,558.00 23.51 35,029.90 0.3 1.7 ------------------------------------------------------------------------- 809,393.40 735,089.90 5.7 2.5 Information Technology 50 ACCENTURE PLC 203.40 10,170.13 225.99 11,299.50 0.1 1.4 113 ADOBE INC 298.89 33,774.14 490.43 55,418.59 0.4 0.0 904 ADVANCED MICRO DEVICES INC 49.95 45,151.00 81.99 74,118.96 0.6 0.0 4124 APPLE INC 41.58 171,468.80 115.81 477,600.40 3.7 0.7 195 AUTODESK INC 183.13 35,710.11 231.01 45,046.95 0.3 0.0 19 BOOKING HOLDINGS INC 1,476.47 28,053.02 1,710.68 32,502.92 0.3 0.0 695 CISCO SYS INC 36.45 25,331.45 39.39 27,376.05 0.2 3.7 1130 CORNING INC 27.53 31,110.74 32.41 36,623.30 0.3 2.7 264 DATADOG INC 81.07 21,402.32 102.16 26,970.24 0.2 0.0 103.9998 DELL TECHNOLOGIES INC 81.75 8,501.97 67.69 7,039.75 0.1 0.0 153 DOCUSIGN INC 228.55 34,968.39 215.24 32,931.72 0.3 0.0 113 DXC TECHNOLOGY CO 70.91 8,012.95 17.85 2,017.05 0.0 0.0 805 DYNATRACE INC 41.38 33,309.21 41.02 33,021.10 0.3 0.0 250 FIDELITY NATIONAL INFORMATION SERVICES 117.07 29,266.30 147.21 36,802.50 0.3 1.0 2610 HEWLETT PACKARD ENTERPRISE CO 13.66 35,663.90 9.37 24,455.70 0.2 5.1 313 INPHI CORP 113.99 35,677.81 112.25 35,134.25 0.3 0.0 7901NTELCORP 23.02 18,185.30 51.78 40,906.20 0.3 2.5 358 MASTERCARD INC 260.70 93,332.14 338.17 121,064.90 0.9 0.5 1291 MEDALLIA INC 29.15 37,629.04 27.42 35,399.22 0.3 0.0 270 MICRON TECHNOLOGY INC 42.61 11,504.70 46.96 12,679.20 0.1 0.0 2039 MICROSOFT CORP 97.73 199,263.20 210.33 428,862.90 3.3 1.0 25 Hi bland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Portfolio Holdings 136 NVIDIA CORP 258.95 35,217.24 541.22 73,605.92 0.6 0.1 831 ORACLE CORP 50.66 42,095.51 59.70 49,610.70 0.4 1.6 304 PAYPAL HOLDINGS INC 105.07 31,942.05 197.03 59,897.12 0.5 0.0 267 PROOFPOINT 116.74 31,168.78 105.55 28,181.85 0.2 0.0 1794 PURE STORAGE INC 16.99 30,486.88 15.39 27,609.66 0.2 0.0 591 QUALCOMM INC 80.95 47,842.15 117.68 69,548.88 0.5 2.2 217 SALESFORCE.COM INC 152.59 33,112.61 251.32 54,536.44 0.4 0.0 89 SERVICENOW INC 274.65 24,444.17 485.00 43,165.00 0.3 0.0 300 SKYWORKS SOLUTIONS INC 109.09 32,726.76 145.50 43,650.00 0.3 1.4 632 VISA INC 166.13 104,996.20 199.97 126,381.00 1.0 0.6 ---------------------------------------------------------------- 1,361,519.00 2,173,458.00 ------ 16.8 --- 0.8 Communication Services 400 ACTIVISION BLIZZARD INC 54.84 21,934.16 80.95 32,380.00 0.3 0.5 83 ALPHABET INC 1,071.39 88,925.74 1,469.60 121,976.80 0.9 0.0 71 ALPHABET INC 1,011.75 71,833.99 1,465.60 104,057.60 0.8 0.0 1430 AT&T INC 38.07 54,433.90 28.51 40,769.30 0.3 7.3 700 COMCAST CORP 40.63 28,438.86 46.26 32,382.00 0.3 2.0 280 ELECTRONIC ARTS INC 131.45 36,804.66 130.41 36,514.80 0.3 0.0 633 FACEBOOK INC 149.76 94,801.04 261.90 165,782.70 1.3 0.0 280 FASTLY INC 76.33 21,371.20 93.68 26,230.40 0.2 125 FOX CORP 91.78 11,472.05 27.97 3,496.25 0.0 3.3 102 NETFLIX.COM INC 364.30 37,158.54 500.03 51,003.06 0.4 0.0 575 PINTEREST INC 36.26 20,849.21 41.51 23,868.25 0.2 0.0 1270 VERIZON COMMUNICATIONS INC 55.43 70,395.94 59.49 75,552.30 0.6 4.2 573.9995 WALT DISNEY CO 115.88 66,515.28 124.08 71,221.86 0.6 0.0 3286 ZYNGA INC CL A 7.48 ---------------------------------------------------------------- 24,583.88 9.12 29,968.32 0.2 ------ 0.0 --- 649,518.50 815,203.60 6.3 0.9 Utilities 400 AMERICAN ELEC PWR INC 72.15 28,861.36 81.73 32,692.00 0.3 3.4 400 DOMINION ENERGY INC 85.81 34,324.60 78.93 31,572.00 0.2 4.8 450 DUKE ENERGY CORP 75.56 33,999.93 88.56 39,852.00 0.3 4.4 1130 EXELON CORP 36.79 41,567.60 35.76 40,408.80 0.3 4.3 150 NEXTERA ENERGY INC 210.55 ------------------------------------------------------------------------- 31,582.80 277.56 41,634.00 0.3 2.0 170,336.30 186,158.80 1.4 3.7 26 Hihlmd Capital MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund Real Estate 156 AMERICAN TOWER CORP 250 CROWN CASTLE INTERNATIONAL CORP 560 PROLOGIS INC 322 SIMON PROPERTY GROUP INC INTERNATIONAL EQUITY (USD) Portfolio Holdings 190.92 29,783.03 241.73 37,709.88 0.3 1.9 129.42 32,355.23 166.50 41,625.00 0.3 2.9 54.87 30,727.03 100.62 56,347.20 0.4 2.3 66.67 21,466.81 64.68 20,826.96 0.2 8.0 ------------------------------------------------------------------------- 114,332.10 156,509.00 1.2 3.1 --------------------------------------------- 6,259,150.00 ---------------- 7,569,953.00 --------- 58.7 --- 1.5 Energy 635 BP PLC SPONSORED ADR 34.28 21,766.94 17.46 11,087.10 0.1 7.1 300 OVINTIV INC 58.09 17,428.01 8.16 2,448.00 0.0 4.7 810 PETROLEO BRASILEIRO S A 10.87 8,801.10 7.12 5,767.20 0.0 4.9 200 ROYAL DUTCH SHELL PLC - ADR B 65.08 13,016.36 24.22 4,844.00 0.0 5.3 ------------------------------------------------------------------------- 61,012.41 24,146.30 0.2 6.0 Materials 183 ARCELORMITTAL S A 45.61 8,346.23 13.25 2,424.75 0.0 0.0 545 BARRICK GOLD CORP 12.43 6,774.45 28.11 15,319.95 0.1 1.1 285 CRH PLC ADR ONE ADR REPSTG ONE ORD SHS 24.24 6,908.05 36.09 10,285.65 0.1 1.2 50 LINDE PLC 177.60 ------------------------------------------------------------------------- 8,879.80 238.13 11,906.50 0.1 0.7 30,908.53 39,936.85 0.3 1.0 Industrials 65 COPA HOLDINGS SA CL A 110.89 7,207.68 50.34 3,272.10 0.0 0.0 714 KONINKLIJKE PHILIPS ELECTRS N V SPON ADR 29.15 20,816.10 47.15 33,665.10 0.3 0.0 125 SENSATA TECHNOLOGIES HOLDING PLC 55.53 6,940.82 43.14 5,392.50 0.0 0.0 530 SIEMENS AG SPONS ADR 58.17 30,831.74 69.65 36,914.50 0.3 2.2 ---------------------------------------------------------------- 65,796.34 79,244.20 ------ 0.6 --- 1.0 Consumer Discretionary 350 BRIGHT SCHOLAR EDUCATION HOLDINGS LTD 14.83 5,188.95 6.39 2,236.50 0.0 1.7 320 DAIMLERAG 85.24 27,277.20 53.66 17,171.20 0.1 1.6 830 HONDA MOTOR CO LTD ADR 35.59 29,542.69 23.70 19,671.00 0.2 1.5 325 INTERCONTINENTAL HOTELS ADR 47.83 15,544.12 52.48 17,056.00 0.1 0.0 250 JD.COM INC 29.85 7,462.38 77.61 19,402.50 0.2 0.0 255 ROYAL CARIBBEAN CRUISES LTD 76.38 19,477.89 64.73 16,506.15 0.1 0.0 Period Ending 9/30/2020 Hihlmd Capital 27 MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund 705 SONY CORP AMER SH NEW ADR 200 YUM CHINA HOLDINGS INC Consumer Staples 360 ANHEUSER-BUSCH INBEV NV SPN ADR 115 DIAGEO PLC SPONSORED ADR NEW 120 MOWI ASA 290 UNILEVER NV Health Care 750 GLAXOSMITHKLINE PLC ADR 100 NOVARTIS AG ADR 180 SMITH AND NEPHEW PLC SPON ADR Financials 675 AEGON N V ORD AMER REG ADR 1175 CREDIT SUISSE GROUP 325 DEUTSCHE BANK AG 1035 ING GROEP N V 325 INVESCO LTD 200 PRUDENTIAL PLC SPON ADR 250 TORONTO DOMINION BK ONT NEW (USD) 775 UBS GROUP AG Information Technology 118 BROADCOM LTD 400 HITACHI LIMITED 490 KYOCERA CORP 50 NXP SEMICONDUCTOR NV 200 SAP SE 1420 STMICROELECTRONICS NV -NY SHS 250 TAIWAN SEMICONDUCTOR MFG Portfolio Holdings 24.17 17,041.84 76.75 54,108.75 0.4 0.5 46.71 9,342.82 52.95 10,590.00 0.1 0.0 130,877 .90 156,742.10 1.2 0.6 113.80 40,968.23 53.88 19,396.80 0.2 1.6 123.61 14,214.91 137.66 15,830.90 0.1 3.2 13.64 1,637.10 17.74 2,128.80 0.0 0.0 41.32 11,982.90 ------------------------ 60.40 17,516.00 0.1 2.6 68,803.i47 54,872.50 0.4 2.3 39.62 29,712.45 37.64 28,230.00 0.2 5.2 93.04 9,303.78 86.96 8,696.00 0.1 2.3 37.47 ------------------------------------------------------------------------- 6,743.93 39.10 7,038.00 0.1 1.4 45,760.16 43,964.00 0.3 4.0 7.54 5,090.47 2.56 1,728.00 0.0 4.7 20.20 23,739.87 9.97 11,714.75 0.1 0.6 31.91 10,370.74 8.40 2,730.00 0.0 0.0 14.40 14,900.70 7.08 7,327.80 0.1 0.0 36.72 11,934.53 11.41 3,708.25 0.0 5.4 40.02 8,004.00 28.59 5,718.00 0.0 0.7 57.17 14,291.29 46.24 11,560.00 0.1 6.9 20.09 ------------------------------------------------------------------------- 15,570.50 11.15 8,641.25 0.1 3.3 103,902.10 53,128.05 0.4 2.8 274.24 32,360.16 364.32 42,989.76 0.3 3.6 62.76 25,104.00 67.82 27,128.00 0.2 2.4 49.36 24,184.21 57.31 28,081.90 0.2 2.7 100.56 5,028.22 124.81 6,240.50 0.0 1.1 80.33 16,065.47 155.81 31,162.00 0.2 0.8 8.84 12,559.46 30.69 43,579.80 0.3 0.5 52.56 ------------------------------------------------------------------------- 13,138.83 81.07 20,267.50 0.2 1.7 128,440.40 199,449.50 1.5 1.9 Period Ending 9/30/2020 Hihlmd Capital 28 MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund Communication Services 50 ALIBABA GROUP HOLDING ADR 80 BAIDU INC ADR 150 IQIYI INC 770 NIPPON TELEG & TEL CORP 300 SOFTBANK GROUP CORP 264 VODAFONE GROUP PLC Utilities 108 NATIONAL GRID GROUP PLC SPONSORED ADR Equitys ETF 350 iSHARES MSCI EMERGING MKT IN Portfolio Holdings 170.99 8,549.50 293.98 14,699.00 0.1 0.0 176.84 14,146.81 126.59 10,127.20 0.1 0.0 22.09 3,313.98 22.58 3,387.00 0.0 0.0 14.45 11,125.70 20.66 15,908.20 0.1 3.6 23.41 7,023.74 30.76 9,228.00 0.1 0.5 35.25 9,305.84 13.42 3,542.88 0.0 7.7 ------------------------------------------------------------------------- 53,465.57 56,892.28 0.4 1.6 76.81 8,295.27 57.79 6,241.32 0.0 5.2 43.43 15,202.25 44.09 15,431.50 0.1 ...... 1.0 --- ---------------------------------------------------------------- 712,464.00 730,048.60 5.7 1.8 Period Ending 9/30/2020 CORPORATE BONDS (USD) 40000 BURLINGTON NORTH SANTA FE LLC SE BD CAL 106.65 42,659.20 101.51 40,606.00 0.3 4.0 A3 4.100% 6/1/21 20000 SUMITOMO MITSUI FINL GRP 100.00 20,000.00 101.34 20,268.64 0.2 2.0 Al 2.060% 7/14/21 55000 BANK OF MONTREAL 99.81 54,896.05 101.51 55,831.21 0.4 1.9 Aa2 1.900% 8/27/21 35000 AMERICAN HONDA FINANCE 99.80 34,930.00 101.19 35,417.65 0.3 1.7 A3 1.700% 9/9/21 25000 BLACKROCK INC 103.95 25,987.75 105.00 26,250.07 0.2 3.2 Aa3 3.380% 6/1/22 40000 CANADIAN IMPERIAL BK COMM SR NT 100.58 40,230.80 103.83 41,530.24 0.3 2.5 Aa2 2.550% 6/16/22 40000 HONEYWELL INTERNATIONAL 100.00 40,000.00 100.16 40,065.84 0.3 0.5 A2 0.480% 8/16/22 35000 GILEAD SCIENCES INC 101.83 35,639.45 104.71 36,650.25 0.3 3.1 A3 3.250% 9/1/22 20000 FRANKLIN RES INC SR NT 102.16 20,431.60 104.42 20,884.44 0.2 2.7 A2 2.800% 9/15/22 40000 PECO ENERGY CO 98.84 39,538.00 103.34 41,334.56 0.3 2.3 Aa3 2.380% 9/15/22 35000 GOLDMAN SACHS GROUP INC 100.00 35,000.00 100.42 35,147.80 0.3 1.0 A3 0.990% 10/31/22 40000 PNC FINANCIAL SERVICES GROUP INC 101.59 40,638.00 104.87 41,949.52 0.3 2.7 A3 2.850% 11/9/22 30000 AT&T BROADBAND CORP 134.68 40,403.70 119.06 35,718.51 0.3 7.9 A3 9.460% 11/15/22 35000 WESTPAC BANKING CORP 100.00 35,000.00 100.33 35,115.22 0.3 2.2 Aa3 2.220% 1/13/23 39000 AMERICAN HONDA FINANCE 100.00 39,000.00 99.85 38,942.47 0.3 0.6 A3 0.580% 5/10/23 30000 BLACKSTONE/GSO SECURED 99.57 29,871.30 100.78 30,232.89 0.2 3.6 Baa3 3.650% 7/14/23 25000 XCEL ENERGY INC 99.91 24,976.50 99.95 24,987.50 0.2 0.5 0.500% 10/15/23 35000 BANK OF AMERICA CORP 100.00 35,000.00 100.43 35,151.37 0.3 2.8 A2 2.820% 3/5/24 40000 ATHENE GLOBAL FUNDING 100.78 40,314.00 104.27 41,707.80 0.3 2.6 NR 2.750% 6/25/24 Hihlmd Capital 29 MANAGEMENT, LLC An Argent Corn pary Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Portfolio Holdings 10000 EMERSON ELECTRIC CO 99.68 9,968.40 110.20 11,019.98 0.1 2.9 A2 3.150% 6/1/25 25000 BOEING CO 129.16 32,291.25 119.42 29,855.72 0.2 6.1 Baal 7.250% 6/15/25 40000 CUMMINS INC 99.82 39,927.20 100.30 40,121.72 0.3 0.7 A2 0.750% 9/1/25 40000 BANK OF AMERICA CORP 100.00 40,000.00 99.98 39,990.80 0.3 1.0 0.980% 9/25/25 35000 NORTHERN TRUST CORP 104.64 36,624.35 115.90 40,565.87 0.3 3.4 A2 3.950% 10/30/25 20000 STATE STREET CORP 100.00 20,000.00 105.85 21,170.70 0.2 2.2 Al 2.350% 11/1/25 25000 BAT INTL FINANCE PLC 100.00 25,000.00 100.34 25,085.00 0.2 1.7 1.670% 3/25/26 70000 WELLS FARGO & CO 105.20 73,640.00 112.77 78,936.34 0.6 3.6 A3 4.100% 6/3/26 40000 NATIONAL AUSTRLIA BK/NY 99.27 39,709.20 109.08 43,632.80 0.3 2.3 Aa3 2.500% 7/12/26 40000 SUMITOMO MITSUI FINANCIAL GROUP INC 100.00 40,000.00 107.77 43,107.84 0.3 2.4 Al 2.630% 7/14/26 38000 RELIANCE STAND LIFE II 99.72 37,894.36 104.44 39,689.10 0.3 2.6 A2 2.750% 1/21/27 40000 BLACKROCK INC 99.59 39,838.00 113.72 45,487.72 0.4 2.8 Aa3 3.200% 3/15/27 40000 MANULIFE FINANCIAL CORP 100.00 40,000.00 108.33 43,333.52 0.3 3.7 NR 4.060% 2/24/32 20000 FIRST UNION CORP 123.80 24,759.40 137.89 27,577.38 0.2 4.8 A3 6.550% 10/15/35 50000 MICROSOFT CORP 99.61 49,806.50 121.35 60,672.80 0.5 2.8 Aaa 3.450% 8/8/36 35000 JOHNSON AND JOHNSON SR BIND CALL 99.70 34,896.05 117.27 41,043.03 0.3 2.9 Aaa 3.400% 1/15/38 13000 SOUTHERN CALIF EDISON CO 140.26 18,234.45 129.00 16,770.06 0.1 4.7 A3 6.050% 3/15/39 8000 MANULIFE FINANCIAL CORP SR BD 99.64 7,971.60 139.85 11,187.80 0.1 3.8 NR 5.380% 3/4/46 6000 DUKE ENERGY CAROLINAS LLC 99.65 5,978.82 121.08 7,265.03 0.1 3.2 Aa2 3.880% 3/15/46 16000 SAN DIEGO GAS & ELECTRIC CO 99.55 15,928.64 114.23 18,276.51 0.1 3.3 A2 3.750% 6/1/47 30000 COMMONSPIRIT HEALTH 100.00 30,000.00 109.40 32,820.87 0.3 3.5 A2 3.820% 10/1/49 40000 MEMORIAL SLOAN-KETTERING 100.00 40,000.00 105.99 42,394.52 0.3 2.8 Aa3 2.960% 1/1/50 20000 KKR GROUP FINANCE CO VII 99.47 19,894.80 103.95 20,789.06 0.2 3.5 NR 3.630% 2/25/50 29000 PRUDENTIAL FINANCIAL INC 99.76 28,931.27 120.27 34,879.46 0.3 3.6 A3 4.350% 2/25/50 35000 ENTERGY ARKANSAS LLC 99.60 34,861.75 100.92 35,322.03 0.3 2.6 2.650% 6/15/51 40000 INTEL CORP 99.34 39,736.40 108.71 43,482.76 0.3 2.9 Al 3.100% 2/15/60 10000 INTERCONTINENTAL EXCHANGE 98.98 9,898.40 100.98 10,098.10 0.1 3.0 A3 3.000% 9/15/60 Accrued Interest 5,414.00 0.0 ------------------------------------------------------------------------- 1,510,307.00 1,587,783.00 12.3 2.8 MUNICIPAL BONDS (USD) 35000 WASHINGTON ST 109.51 38,328.15 107.55 37,641.80 0.3 4.3 Aaa 4.640% 8/1/22 30000 UNIV OF NC CHAPEL HIL 101.04 30,312.00 103.21 30,963.30 0.2 1.9 Aaa 2.000% 12/1/22 25000 COMMONWEALTH FING AUTH PA 100.00 25,000.00 108.52 27,130.50 0.2 5.2 Al 5.650% 6/1/24 15000 SAN FRANCISCO CA CITY & CNTY PUB UTILS 100.00 15,000.00 111.59 16,738.35 0.1 3.3 Aa2 3.700% 11/1/32 6000 METRO GOVT NASH & DAVD CNTY TN WTR &! 134.47 8,067.96 150.80 9,048.06 0.1 4.4 Aa2 6.570% 7/1/37 35000 SAN FRANCISCO CALIF CITY & CNTY CMNTY 97.21 34,023.85 108.02 37,807.00 0.3 3.5 NR 3.750% 9/1/37 Hihlmd Capital 30 MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Period Ending 9/30/2020 Portfolio Holdings TotalUnit ...Coupon Quantity Security Cost Cost Price Value Assets Yield Ratings % Date 20000 MIAMI-DADE CNTY FLA AVIATION 100.00 20,000.00 105.47 21,093.20 0.2 3.5 NR 3.730% 10/1/37 10000 VIRGINIA PORT AUTH PORT FAC 100.00 10,000.00 106.19 10,619.10 0.1 4.2 Al 4.480% 7/1/45 25000 UNIV OF TEXAS TX PERM UNIV FND REV 100.00 25,000.00 120.51 30,126.75 0.2 2.8 Aaa 3.380% 7/1/47 Accrued Interest 208.66 0.0 ------------------------------------------------------------------------- 205,732.00 221,376.70 1.7 3.6 GOVERNMENT BONDS (USD) 35000 US TREASURY N/B 111.21 38,922.46 134.17 46,958.80 0.4 2.2 Aaa 3.000% 5/15/45 Accrued Interest 393.75 0.0 ------------------------------------------------------------------------- 38,922.46 47,352.55 0.4 2.2 GOVERNMENT SPONSORED BOND (USD) 40000 PROVINCE OF QUEBEC 99.74 39,897.60 102.72 41,089.04 0.3 2.3 Aaa 2.380% 1/31/22 40000 MANITOBA PROV OF 99.23 39,692.80 107.75 43,100.36 0.3 2.0 Aa2 2.130% 6/22/26 18000 FNMA 135.47 24,384.95 160.75 28,934.24 0.2 3.5 Aaa 5.630% 7/15/37 43000 TENNESSEE VALLEY AUTH 137.08 58,943.80 171.11 73,578.89 0.6 3.1 Aaa 5.380% 4/1/56 Accrued Interest 1,749.86 0.0 ------------------------------------------------------------------------- 162,919.20 188,452.40 1.5 2.7 MORTGAGE POOLS (USD) 2.04 FGCI #G12205 96.88 1.98 104.75 2.14 0.0 4.3 Aaa 4.500% 6/15/21 35000 FHMS KBX1 Al 99.69 34,890.63 107.51 37,629.66 0.3 2.7 Aaa 2.920% 9/25/24 1640.79 FHMS KJ17 Al 100.00 1,640.79 101.28 1,661.84 0.0 2.4 Aaa 2.400% 10/25/24 12467.78 FN AD4398 106.25 13,247.02 106.00 13,215.95 0.1 3.8 Aaa 4.000% 6/1/25 31985.99 FN AM9049 102.66 32,835.78 103.10 32,977.12 0.3 3.0 Aaa 3.050% 6/25/25 20000 FHMS KJ 17 A2 102.00 20,399.94 107.75 21,549.08 0.2 2.8 Aaa 2.980% 11/25/25 75000 FHMS KCO3 A2 102.01 76,510.15 109.18 81,882.36 0.6 3.2 Aaa 3.500% 1/25/26 35000 FHMS KG01 A7 103.00 36,048.64 109.95 38,482.29 0.3 2.6 Aaa 2.880% 4/25/26 35146.85 FHMSK068Al 102.00 35,849.51 107.72 37,861.48 0.3 2.7 Aaa 2.950% 2/25/27 57000 FHMS K068 A2 103.00 58,708.12 115.02 65,562.53 0.5 2.8 Aaa 3.240% 8/25/27 10708.56 FN MA1387 103.69 11,103.44 105.48 11,295.73 0.1 2.8 Aaa 3.000% 3/25/28 40000 FN AN9038 100.66 40,262.50 113.21 45,283.48 0.4 3.1 Aaa 3.460% 5/1/28 30000 FN 109515 104.34 31,303.13 115.69 34,705.60 0.3 3.4 Aaa 3.990% 9/1/28 20000 FN 387873 102.66 20,531.25 114.74 22,948.52 0.2 3.3 Aaa 3.750% 11/1/28 32000 FN BL0484 105.99 33,917.50 116.98 37,432.75 0.3 3.6 Aaa 4.220% 11/1/28 18000 FHMSK088A2 103.00 18,539.21 119.41 21,493.41 0.2 3.1 Aaa 3.690% 1/25/29 43904.36 FN BL1409 103.84 45,591.89 114.81 50,404.85 0.4 3.3 Aaa 3.800% 1/25/29 Hihlmd Capital 31 MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Portfolio Holdings Period Ending 9/30/2020 37000 FHLMC MF KG01 103.00 38,109.45 112.77 41,725.27 0.3 2.6 Aaa 2.940% 4/25/29 84540.67 FHR 4823 LV 103.31 87,341.23 101.57 85,870.63 0.7 3.9 Aaa 4.000% 10/15/29 22418.22 FG 134676 105.50 23,651.22 106.82 23,947.74 0.2 2.8 Aaa 3.000% 7/1/31 28570.42 FN A57986 103.06 29,445.39 104.68 29,907.67 0.2 2.4 Aaa 2.500% 9/1/31 14925.12 FG G30701 111.00 16,566.88 111.95 16,708.03 0.1 4.5 Aaa 5.000% 11/1/31 33235.24 FN A58448 99.50 33,069.25 104.48 34,724.61 0.3 1.9 Aaa 2.000% 12/25/31 11680.01 FN MA0976 103.12 12,044.92 108.00 12,614.63 0.1 3.2 Aaa 3.500% 2/25/32 24356.83 G2 784739 102.12 24,874.17 105.68 25,739.56 0.2 3.8 Aaa 4.000% 5/20/34 22231.61 FHR 3342 PZ 104.94 23,329.29 113.09 25,142.76 0.2 4.4 Aaa 5.000% 6/15/37 15000 FNR 2017 134VD 94.00 14,100.00 106.26 15,938.38 0.1 2.8 Aaa 3.000% 4/20/38 2652.85 FN 889579 109.39 2,901.97 117.81 3,125.44 0.0 5.1 Aaa 6.000% 5/1/38 3346.05 G2 4194 106.13 3,551.00 118.64 3,969.63 0.0 4.6 Aaa 5.500% 7/20/38 1296.68 GNMA 4195 99.89 1,295.26 115.00 1,491.14 0.0 5.2 Aaa 6.000% 7/20/38 9585.04 GNMA4447 104.81 10,046.32 114.20 10,946.58 0.1 4.4 Aaa 5.000% 5/20/39 14980.3 G2 4496 109.58 16,415.13 114.17 17,102.78 0.1 4.4 Aaa 5.000% 7/20/39 50000 HINTT 2020-AA 99.98 49,992.40 99.99 49,993.65 0.4 1.4 Aaa 1.390% 10/9/39 7102.25 FNR 2010-64 KA 103.05 7,318.60 105.75 7,510.59 0.1 4.3 Aaa 4.500% 6/25/40 6374.73 FG A95828 104.89 6,686.21 112.68 7,182.88 0.1 4.0 Aaa 4.500% 12/15/40 16679.62 FN 783307 101.38 16,909.02 108.48 18,094.17 0.1 3.7 Aaa 4.000% 4/15/41 10575.97 FHR 4667 DA 103.70 10,967.61 101.10 10,692.79 0.1 3.5 Aaa 3.500% 6/15/41 31627.16 FNR 2012-6 MA 103.41 32,704.46 102.75 32,496.10 0.3 3.9 Aaa 4.000% 10/25/41 5601.28 GN AW7430 104.65 5,861.58 111.10 6,223.17 0.0 4.1 Aaa 4.500% 1/25/42 8289.36 FNR 2012 110K1 99.00 8,206.46 103.55 8,583.70 0.1 2.9 Aaa 3.000% 3/20/42 34406.6 FNR 2012-90 DA 100.31 34,514.12 99.83 34,346.94 0.3 1.5 Aaa 1.500% 3/25/42 21573.1 FN MA 3024 102.16 22,038.01 104.20 22,479.72 0.2 3.4 Aaa 3.500% 6/1/42 5623.84 FN MA1136 102.12 5,743.27 104.16 5,857.62 0.0 3.4 Aaa 3.500% 8/25/42 10000 FNR 2013-111 PL 102.12 10,212.50 102.81 10,281.12 0.1 1.9 Aaa 2.000% 12/25/42 6490.08 FHR 4863 LA 101.34 6,577.21 100.92 6,549.98 0.1 4.0 Aaa 4.000% 2/15/43 18819.88 GNR 2013-100 ME 99.11 18,652.59 103.82 19,538.02 0.2 2.2 Aaa 2.250% 2/20/43 8349.87 FN 2017 13 CA 100.09 8,357.78 100.49 8,390.39 0.1 2.5 Aaa 2.500% 10/25/43 26452.48 FN 2015 2PA 98.92 26,167.29 103.23 27,307.20 0.2 2.2 Aaa 2.250% 3/25/44 10915.95 FHR 4710 QA 102.16 11,151.25 102.44 11,182.00 0.1 3.4 Aaa 3.500% 4/15/44 26067.5 FHR 4388 MC 99.50 25,937.72 104.31 27,190.81 0.2 2.4 Aaa 2.500% 7/15/44 3487.17 FHR 4832 DA 103.17 3,597.83 100.97 3,520.88 0.0 4.5 Aaa 4.500% 11/15/44 16171.33 FNR 2016-90 CA 96.25 15,564.90 104.94 16,970.92 0.1 2.9 Aaa 3.000% 2/25/45 21517.99 FNR 2016 31 PC 97.45 20,969.24 103.90 22,357.53 0.2 2.9 Aaa 3.000% 3/25/45 14468.48 FHR 4546 TH 95.41 13,803.85 103.77 15,014.56 0.1 2.4 Aaa 2.500% 12/15/45 Hi bland Capital 32 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund 9048.51 FNR 2017 56 PA 14576.71 GNR 2017 59P 18666.11 G2 MA3725 19225.65 FN MA2743 4859.26 FN MA2777 30000 FNR 2017-55 HW 6949.12 FN BE2951 8533.62 FHR 4682 LD 10283.93 FNR 2018 69 PA 9596.63 GNR 2017 991E 16502.96 FHR 4713 YH 30710.54 FHR 2017 72 GH 23466.32 GNR 2017 134PT 7507.41 FG T65441 40000 FNR 2018 1 HB 25617.9 FNR 2018-11 KE 28000 FNR 2018 59D 36000 GNR 2019-133 EB 8528.099 GNR 2019-162 GA 32249.88 GNMA 18-26 AD 18586.69 GNR 2013-17 AC Accrued Interest TOTAL PORTFOLIO 98.84 97.97 98.06 101.31 101.00 93.47 101.81 94.86 99.32 100.31 93.94 99.19 98.31 98.94 95.66 98.84 94.75 92.50 100.75 98.56 98.25 Portfolio Holdings 8,943.87 106.22 9,610.88 0.1 2.8 14, 280.51 101.79 14, 83 8.11 0.1 2.9 18,304.28 103.27 19,276.28 0.1 2.9 19,477.71 103.10 19,821.07 0.2 2.9 4,907.88 103.04 5,007.16 0.0 2.9 28,040.63 107.31 32,193.22 0.2 2.8 7,074.85 104.02 7,228.28 0.1 2.9 8,094.74 105.68 9,018.19 0.1 2.6 10,213.96 103.05 10,597.40 0.1 3.4 9,626.82 104.79 10,055.87 0.1 2.6 15,502.47 103.02 17,000.65 0.1 2.4 30,461.02 100.48 30,859.19 0.2 2.5 23,070.03 105.38 24,729.16 0.2 2.4 7,427.68 103.85 7,796.27 0.1 2.9 38,262.50 105.27 42,108.74 0.3 2.4 25,321.81 102.76 26,323.92 0.2 1.9 26,530.00 110.06 30,817.06 0.2 2.7 33,300.00 99.01 35,644.39 0.3 2.0 8,592.06 101.96 8,695.45 0.1 2.9 31,786.70 103.29 33,312.07 0.3 2.4 18,261.44 101.52 18,869.56 0.1 1.8 3,963.80 0.0 ------------------------------------------------------------------------- 1,597,538.00 1,692,875.00 13.1 2.9 ------------------------------------------------------------------------- 11,351,292.00 12,902,100.00 100.0 1.9 ------------------------------------------------------------------------- 11,351,292.00 12,902,100.00 100.0 1.9 33 Period Ending 9/30/2020 Aaa 3.000% 12/25/45 Aaa 3.000% 4/20/46 Aaa 3.000% 6/20/46 Aaa 3.000% 9/25/46 Aaa 3.000% 10/25/46 Aaa 3.000% 11/25/46 Aaa 3.000% 1/25/47 Aaa 2.750% 5/15/47 Aaa 3.500% 5/25/47 Aaa 2.750% 6/20/47 Aaa 2.500% 7/15/47 Aaa 2.500% 8/25/47 Aaa 2.500% 9/20/47 Aaa 3.000% 10/1/47 Aaa 2.500% 1/20/48 Aaa 2.000% 3/25/48 Aaa 3.000% 4/20/48 Aaa 2.000% 4/20/49 Aaa 3.000% 10/20/49 Aaa 2.500% 3/16/52 Aaa 1.790% 5/16/53 Hi bland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund BAC Purchases 7/20/20 7/23/20 250,000.00 BANK OF AMERICA CORP 1.898% Due 07-23-31 8/10/20 8/24/20 250,000.00 CONCHO RESOURCES INC 2.400% Due 02-15-31 7/20/20 8/3/20 40,000.00 FUR SYSTEMS INC 2.500% Due 08-01-30 BANK OF AMERICA BB 8/5/20 8/10/20 100,000.00 ACTIVISION BLIZZARD 2.500% Due 09-15-50 BARCLAYS-EQ 9/3/20 9/8/20 153.00 DOCUSIGN INC 8/3/20 8/5/20 805.00 DYNATRACE INC 9/25/20 9/29/20 147.00 LULULEMON ATHLETICA INC 7/10/20 7/14/20 83.00 MASTERCARD INC 6/30/20 7/2/20 265.00 MICROSOFT CORP 8/3/20 8/5/20 575.00 PINTEREST INC 6/30/20 7/2/20 260.00 SAREPTA THEROPEUTICS INC 8/3/20 8/5/20 1,329.00 SPROUTS FARMERS MARKET INC 8/14/20 8/18/20 355.00 TANDEM DIABETES CARE INC 9/2/20 9/4/20 350.00 VERIZON COMMUNICATIONS INC 7/10/20 7/14/20 106.00 VISA INC CITICORP 7/8/20 7/16/20 30,000.00 BLACKSTONE/GSO SECURED 3.650% Due 07-14-23 9/22/20 9/25/20 25,000.00 XCEL ENERGY INC 0.500% Due 10-15-23 DEUTSCHE 9/2/20 9/4/20 680.00 HOLOGIC INC 6/30/20 7/2/20 3,091.00 VERTIV HOLDINGS CO Period Ending 9/30/2020 100.00 250,000.00 0.00 0.00 99.76 249,402.50 0.00 0.00 99.81 39,922.80 0.00 0.00 -------------------------------------------------- 539,325.30 0.00 0.00 99.72 99,725.00 0.00 0.00 228.55 34,968.39 0.04 6.12 41.38 33,309.21 0.04 32.20 314.83 46,280.32 0.04 5.88 296.26 24,589.81 0.04 3.32 202.32 53,615.75 0.04 10.60 36.26 20,849.21 0.04 23.00 159.78 41,543.06 0.04 10.40 25.10 33,360.16 0.04 53.16 96.38 34,213.55 0.04 14.20 60.52 21,182.04 0.04 14.00 192.38 20,392.42 0.04 4.24 ---------------- ------------- 364,303.90 --------------- 0.04 -----• 177.12 99.57 29,871.30 0.00 0.00 99.91 24,976.50 0.00 0.00 -------------------------------------------------- 54,847.80 0.00 0.00 61.73 41,977.35 0.02 13.60 13.51 -------- 41,774.25 --------------------- 0.02 ---------------- 61.82 ----• 83,751.60 0.02 75.42 Hihlmd Capital 34 MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund GS Jones Trading JPMORGAN Period Ending 9/30/2020 Purchases 9/8/20 9/10/20 250,000.00 ANGLO AMERICAN CAPITAL 99.09 247,737.50 0.00 0.00 2.000% Due 09-10-30 9/22/20 9/25/20 25,000.00 BAT INTL FINANCE PLC 100.00 25,000.00 0.00 0.00 1.668% Due 03-25-26 7/28/20 8/4/20 200,000.00 CHILDREN'S HEATH SYS TX 100.00 200,000.00 0.00 0.00 2.511% Due 08-15-50 8/17/20 8/19/20 40,000.00 HONEYWELL INTERNATIONAL 100.00 40,000.00 0.00 0.00 0.483% Due 08-16-22 8/5/20 8/12/20 21,000.00 HOSPITAL SPECIAL SURGERY 100.00 21,000.00 0.00 0.00 2.667% Due 10-01-50 8/24/20 8/28/20 300,000.00 NORDEA BANK ABP 99.47 298,404.00 0.00 0.00 0.750% Due 08-28-25 7/15/20 7/21/20 200,000.00 UNIV OF VA UNIV REV 100.00 200,000.00 0.00 0.00 2.256% Due 09-01-50 1,032,142.00 0.00 0.00 8/12/20 8/14/20 449.00 AXON ENTERPRISE INC 79.64 35,759.53 0.01 4.49 8/14/20 8/18/20 264.00 DATADOG INC 81.07 21,402.32 0.01 2.64 9/16/20 9/18/20 450.00 EASTMAN CHEMICAL CO 83.28 37,475.37 0.01 4.50 9/30/20 10/2/20 280.00 ELECTRONIC ARTS INC 131.45 36,804.66 0.01 2.80 7/15/20 7/17/20 350.00 HILTON WORLDWIDE HOLDINGS INC 80.47 28,163.28 0.01 3.50 8/12/20 8/14/20 313.00 INPHI CORP 113.99 35,677.81 0.01 3.13 9/15/20 9/17/20 1,291.00 MEDALLIA INC 29.15 37,629.04 0.01 12.91 9/10/20 9/14/20 800.00 MONDELEZ INTERNATIONAL INC 57.43 45,943.36 0.01 8.00 7/8/20 7/10/20 350.00 NEWMONT MINING CORPORATION 63.85 22,346.84 0.01 3.50 7/10/20 7/14/20 445.00 TEMPUR SEALY INTERNATIONAL INC 73.31 32,622.10 0.01 4.45 8/3/20 8/5/20 1,393.00 VIRGIN GALACTIC HOLDINGS INC 24.06 -------------------------------- 33,517.25 0.01 ............ 13.93 ------ 367,341.60 0.01 63.85 8/4/20 8/7/20 200,000.00 BLOCK FINANCIAL LLC 99.69 199,374.00 0.00 0.00 3.875% Due 08-15-30 8/17/20 8/24/20 40,000.00 CUMMINS INC 99.82 39,927.20 0.00 0.00 0.750% Due 09-01-25 35 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Purchases Period Ending 9/30/2020 9/8/20 9/11/20 35,000.00 ENTERGY ARKANSAS LLC 99.60 34,861.75 0.00 0.00 2.650% Due 06-15-51 7/30/20 8/7/20 400,000.00 ENTERPRISE PRODUCTS OPER 99.23 396,932.00 0.00 0.00 3.200% Due 02-15-52 9/15/20 9/23/20 400,000.00 SBIC 2020-10B 1 100.00 400,000.00 0.00 0.00 1.034% Due 09-10-30 -------------------------------------------------- 1,071,095.00 0.00 0.00 MISCHLER FINANCIAL GROUP 7/27/20 8/4/20 400,000.00 AT&T INC 99.94 399,768.00 0.00 0.00 3.300% Due 02-01-52 MORGAN STANLEY 9/22/20 10/6/20 225,000.00 T-MOBILE USA INC 99.79 224,534.30 0.00 0.00 3.300% Due 02-15-51 REDI 8/31/20 9/2/20 16.00 ABBVIE INC 95.54 1,528.64 0.01 0.16 8/31/20 9/2/20 3.00 ALPHABET INC 1,636.50 4,909.49 0.01 0.03 8/31/20 9/2/20 2.00 ALPHABETINC 1,631.27 3,262.55 0.01 0.02 8/31/20 9/2/20 9.00 AMERICAN TOWER CORP 249.45 2,245.05 0.01 0.09 9/14/20 9/16/20 300.00 BOEING CO 165.12 49,535.34 0.01 3.00 8/31/20 9/2/20 5.00 BROADCOM LTD 347.59 1,737.95 0.01 0.05 8/31/20 9/2/20 34.00 COCA COLA CO 49.59 1,686.06 0.01 0.34 8/31/20 9/2/20 5.00 COSTCO WHOLESALE CORP 347.82 1,739.12 0.01 0.05 8/31/20 9/2/20 9.00 FACEBOOK INC 295.07 2,655.63 0.01 0.09 8/31/20 9/2/20 3.00 LOCKHEED MARTIN CORP 389.86 1,169.58 0.01 0.03 8/31/20 9/2/20 6.00 MCDONALDS CORP 214.05 1,284.30 0.01 0.06 8/31/20 9/2/20 4.00 NETFLIX.COM INC 530.05 2,120.20 0.01 0.04 8/31/20 9/2/20 10.00 NEUROCRINE BIOSCIENCES INC 117.03 1,170.30 0.01 0.10 8/31/20 9/2/20 4.00 NIKE INC 112.09 448.36 0.01 0.04 8/31/20 9/2/20 13.00 PEPSICO INC 140.25 1,823.25 0.01 0.13 8/31/20 9/2/20 2.00 SHERWIN WILLIAMS CO 672.08 1,344.17 0.01 0.02 8/31/20 9/2/20 6.00 TESLA MOTORS INC 498.57 2,991.42 0.01 0.06 8/31/20 9/2/20 3.00 THERMO FISHER SCIENTIFIC INC 428.50 1,285.50 0.01 0.03 8/31/20 9/2/20 9.00 UNION PACIFIC CORP 192.72 1,734.48 0.01 0.09 8/31/20 9/2/20 22.00 UNITED PARCEL SERVICE INC 163.86 3,604.92 0.01 0.22. 0.01 4.65 36 Hi bland Capital MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund SIEBERT WILLIAMS SHANK 9/22/20 8/20/20 strategas 8/14/20 SUNTRUST 8/3/20 TD SECS 9/11/20 TRUIST SECS 9/4/20 WELLS 8/11/20 8/10/20 8/17/20 8/17/20 WILLIAMS CAPITAL CORP 8/20/20 8/6/20 PURCHASES SUBTOTAL Purchases 9/25/20 40,000.00 BANK OF AMERICA CORP 0.981% Due 09-25-25 8/25/20 250,000.00 JOHNSON & JOHNSON 2.450% Due 09-01-60 8/18/20 280.00 FASTLY INC 8/6/20 450,000.00 SPIRIT REALTY LP 3.200% Due 02-15-31 9/15/20 200,000.00 GRAY OAK PIPELINE LLC 2.600% Due 10-15-25 9/17/20 50,000.00 HINTT 2020-A A 1.390% Due 10-09-39 8/14/20 300,000.00 CNA FINANCIAL CORP 2.050% Due 08-15-30 8/24/20 6,000.00 ESSEX PORTFOLIO LP 2.650% Due 09-01-50 8/20/20 40,000.00 INTERCONTINENTAL EXCHANGE 0.700% Due 06-15-23 8/20/20 10,000.00 INTERCONTINENTAL EXCHANGE 3.000% Due 09-15-60 8/25/20 40,000.00 JOHNSON & JOHNSON 0.550% Due 09-01-25 8/11/20 100,000.00 SERVICENOW INC 1.400% Due 09-01-30 37 Period Ending 9/30/2020 100.00 40,000.00 0.00 0.00 98.96 247,412.50 0.00 0.00 ------------ ------------------------------------- 287,412.50 0.00 0.00 76.33 21,371.20 0.03 8.40 99.00 445,509.00 0.00 0.00 99.86 199,712.00 0.00 0.00 99.98 49,992.40 0.00 0.00 99.75 299,244.00 0.00 0.00 99.69 5,981.46 0.00 0.00 99.90 39,961.20 0.00 0.00 98.98 9,898.40 0.00 0.00 -------------------------------------------------- 355,085.10 0.00 0.00 99.89 39,956.40 0.00 0.00 99.63 99,626.00 0.00 0.00 ------------ ------------------------------------- 139,582.40 0.00 0.00 -------------------------------------------------- 5,823,775.00 0.00 329.44. 0.00 329.44 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Sales Period Ending 9/30/2020 BARCLAYS-EQ 9/25/20 9/29/20 34.00 ALLEGHANY CORP 506.09 17,207.11 0.04 1.36 9/10/20 9/14/20 450.00 KELLOGG CO 66.27 29,822.42 0.04 18.00 6/30/20 7/2/20 244.00 L3HARRIS TECHNOLOGIES INC 170.10 41,505.46 0.04 9.76 7/1/20 7/6/20 100.00 MICROSOFT CORP 202.73 20,273.44 0.04 4.00 7/15/20 7/17/20 65.00 MICROSOFT CORP 207.84 13,509.56 0.04 2.60 7/15/20 7/17/20 35.00 MICROSOFT CORP 207.84 7,274.38 0.04 1.40 9/30/20 10/2/20 12.50 OCCIDENTAL PETROLEUM CORP WARRAN 2.95 36.88 0.04 0.50 9/30/20 10/2/20 18.75 OCCIDENTAL PETROLEUM CORP WARRAN 2.95 55.32 0.04 0.75 9/30/20 10/2/20 6.25 OCCIDENTAL PETROLEUM CORP WARRAN 2.95 18.44 0.04 0.25 9/30/20 10/2/20 12.50 OCCIDENTAL PETROLEUM CORP WARRAN 2.95 36.88 0.04 0.50 8/14/20 8/18/20 31.00 PERSPECTA INC 21.54 667.77 0.04 1.24 8/14/20 8/18/20 25.00 PERSPECTA INC 21.54 538.53 0.04 1.00 9/9/20 9/11/20 50.00 SKYWORKS SOLUTIONS INC 137.62 6,880.99 0.04 2.00 9/2/20 9/4/20 645.00 SMARTSHEET INC 59.46 38,354.66 0.04 25.80 7/10/20 7/14/20 222.00 SYNOPSYS INC COM 197.33 43,808.31 0.04 8.88 9/14/20 9/16/20 445.00 TEMPUR SEALY INTERNATIONAL INC 91.56 40,744.22 0.04 17.80 8/12/20 8/14/20 263.00 UNIVERSAL DISPLAY CORP 187.98 49,439.38 0.04 10.52 -------------------------------------------------- 310,173.80 0.04 106.36 COWEN & CO 8/14/20 8/18/20 435.00 GUARDANT HEALTH INC 85.42 37,159.87 0.03 13.05 DEUTSCHE 9/10/20 9/14/20 200.00 SCHLUMBERGER LTD 17.86 3,571.22 0.02 4.00 9/10/20 9/14/20 400.00 SCHLUMBERGER LTD 17.86 7,142.44 0.02 8.00 9/10/20 9/14/20 50.00 SCHLUMBERGER LTD 17.86 892.81 0.02 1.00 9/10/20 9/14/20 100.00 SCHLUMBERGER LTD 17.86 1,785.61 0.02 2.00 9/28/20 9/30/20 1,393.00 VIRGIN GALACTIC HOLDINGS INC 19.69 -------------------------------------------------- 27,425.61 0.02 27.86 40,817.69 0.02 42.86 FTN FINANCIAL 9/15/20 9/23/20 400,000.00 SBIC 2020-10B 1 100.25 401,000.00 0.00 0.00 1.034% Due 09-10-30 GOLDMAN SACHS BB 8/21/20 8/25/20 40,000.00 JOHNSON & JOHNSON 100.13 40,050.40 0.00 0.00 0.550% Due 09-01-25 38 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Sales Period Ending 9/30/2020 GS 7/16/20 7/21/20 200,000.00 UNIV OF VA UNIV REV 100.21 200,428.00 0.00 0.00 2.256% Due 09-01-50 Jones Trading 7/10/20 7/14/20 354.00 ANAPLAN INC 48.98 17,338.86 0.01 3.54 7/10/20 7/14/20 140.00 ANAPLAN INC 48.98 6,857.17 0.01 1.40 7/10/20 7/14/20 189.00 ANAPLAN INC 48.98 9,257.19 0.01 1.89 7/10/20 7/14/20 374.00 ANAPLAN INC 48.98 18,318.45 0.01 3.74 8/3/20 8/5/20 45.00 COSTAR GROUP INC 840.64 37,828.93 0.01 0.45 9/16/20 9/18/20 14.69 DOW INC 49.81 731.45 0.01 0.15 9/16/20 9/18/20 66.66 DOW INC 49.81 3,320.31 0.01 0.67 9/16/20 9/18/20 116.66 DOW INC 49.81 5,810.54 0.01 1.16 9/10/20 9/14/20 300.00 EOG RESOURCES INC 38.99 11,695.54 0.01 3.00 8/3/20 8/5/20 148.00 PENUMBRA INC 229.59 33,979.25 0.01 1.48 8/14/20 8/18/20 1,482.00 SWITCH INC 16.98 -------------------------------------------------- 25,169.43 0.01 14.82 170,307.10 0.01 32.30 JPMORGAN 9/10/20 9/11/20 6,000.00 US TREASURYN/B 103.28 6,196.64 0.00 0.00 1.750% Due 09-30-22 MARKET AXESS MARKET AXESS 9/9/20 9/11/20 250,000.00 ANGLO AMERICAN CAPITAL 99.28 248,192.50 0.00 0.00 2.000% Due 09-10-30 7/28/20 8/4/20 400,000.00 AT&T INC 100.74 402,952.00 0.00 0.00 3.300% Due 02-01-52 8/5/20 8/7/20 200,000.00 BLOCK FINANCIAL LLC 101.03 202,068.00 0.00 0.00 3.875% Due 08-15-30 7/31/20 8/7/20 400,000.00 ENTERPRISE PRODUCTS OPER 99.51 398,028.00 0.00 0.00 3.200% Due 02-15-52 8/17/20 8/24/20 6,000.00 ESSEX PORTFOLIO LP 94.72 5,683.32 0.00 0.00 2.650% Due 09-01-50 7/29/20 8/3/20 40,000.00 FUR SYSTEMS INC 102.83 41,133.20 0.00 0.00 2.500% Due 08-01-30 9/14/20 9/16/20 200,000.00 GRAY OAK PIPELINE LLC 100.65 201,308.00 0.00 0.00 39 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund REDI Period Ending 9/30/2020 Sales 2.600% Due 10-15-25 8/18/20 8/20/20 40,000.00 INTERCONTINENTAL EXCHANGE 100.08 40,033.60 0.00 0.00 0.700% Due 06-15-23 9/8/20 9/10/20 35,000.00 KKR GROUP FINANCE CO VII 103.00 36,050.70 0.00 0.00 3.625% Due 02-25-50 -------------------------------------------------- 1,575,449.00 0.00 0.00 7/1/20 7/6/20 29.00 ABBVIE INC 98.70 2,862.23 0.01 0.29 7/1/20 7/6/20 9.00 ADOBE INC 436.84 3,931.52 0.01 0.09 7/1/20 7/6/20 76.00 ADVANCED MICRO DEVICES INC 52.37 3,980.03 0.01 0.76 7/1/20 7/6/20 3.00 ALLEGHANY CORP 482.67 1,448.00 0.01 0.03 7/1/20 7/6/20 7.00 ALPHABETINC 1,433.65 10,035.53 0.01 0.07 7/1/20 7/6/20 6.00 ALPHABET INC 1,437.28 8,623.66 0.01 0.06 7/1/20 7/6/20 1.00 AMAZON COM INC 2,811.45 2,811.45 0.01 0.01 7/1/20 7/6/20 8.00 AMAZON COM INC 2,811.45 22,491.64 0.01 0.08 7/1/20 7/6/20 12.00 AMERICAN TOWER CORP 262.72 3,152.69 0.01 0.12 7/1/20 7/6/20 16.00 AMGEN INC 249.16 3,986.63 0.01 0.16 7/1/20 7/6/20 88.00 ANAPLAN INC 46.56 4,097.18 0.01 0.88 7/1/20 7/6/20 86.00 APPLE INC 366.72 31,537.73 0.01 0.86 7/1/20 7/6/20 16.00 AUTODESK INC 238.99 3,823.91 0.01 0.16 7/1/20 7/6/20 2.00 BOOKING HOLDINGS INC 1,660.87 3,321.74 0.01 0.02 7/1/20 7/6/20 49.00 BRISTOL-MYERS SQU I BB CO 59.04 2,892.89 0.01 0.49 7/1/20 7/6/20 2.00 BROADCOM LTD 314.30 628.60 0.01 0.02 7/1/20 7/6/20 7.00 BROADCOM LTD 314.30 2,200.12 0.01 0.07 7/1/20 7/6/20 31.00 CARMAX INC 88.66 2,748.39 0.01 0.31 7/1/20 7/6/20 63.00 COCA COLA CO 45.09 2,840.60 0.01 0.63 7/1/20 7/6/20 4.00 COSTAR GROUP INC 716.27 2,865.09 0.01 0.04 7/1/20 7/6/20 9.00 COSTCO WHOLESALE CORP 302.71 2,724.41 0.01 0.09 7/1/20 7/6/20 20.00 ELI LILLY & CO 163.46 3,269.12 0.01 0.20 7/1/20 7/6/20 15.00 ESTEE LAUDER COS INC 188.63 2,829.46 0.01 0.1S 7/1/20 7/6/20 92.00 EXELIXIS INC 23.58 2,169.31 0.01 0.92 7/1/20 7/6/20 52.00 FACEBOOK INC 234.50 12,194.25 0.01 0.52 7/1/20 7/6/20 36.00 GUARDANT HEALTH INC 82.11 2,955.89 0.01 0.36 7/1/20 7/6/20 17.00 HOME DEPOT INC 248.19 4,219.31 0.01 0.17 7/1/20 7/6/20 12.00 HOME DEPOT INC 248.19 2,978.33 0.01 0.12 7/1/20 7/6/20 58.00 HORIZON THERAPEUTICS PLC 54.94 3,186.44 0.01 0.58 Hi -bland Capital 40 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Sales Period Ending 9/30/2020 7/1/20 7/6/20 15.00 INSULET CORP 193.48 2,902.13 0.01 0.15 7/1/20 7/6/20 27.00 JOHNSON &JOHNSON 140.77 3,800.70 0.01 0.27 7/1/20 7/6/20 10.00 LENDING TREE INC 291.03 2,910.33 0.01 0.10 7/1/20 7/6/20 5.00 LOCKHEED MARTIN CORP 362.71 1,813.55 0.01 0.05 7/1/20 7/6/20 23.00 MASTERCARD INC 298.87 6,874.08 0.01 0.23 7/1/20 7/6/20 10.00 MCDONALDS CORP 184.39 1,843.95 0.01 0.10 7/1/20 7/6/20 56.00 MERCK & CO INC 78.51 4,396.46 0.01 0.56 7/1/20 7/6/20 165.00 MICROSOFTCORP 204.85 33,799.50 0.01 1.65 7/1/20 7/6/20 3.00 NETFLIX.COM INC 470.04 1,410.12 0.01 0.03 7/1/20 7/6/20 5.00 NETFLIX.COM INC 470.04 2,350.19 0.01 0.05 7/1/20 7/6/20 18.00 NEUROCRINE BIOSCIENCES INC 124.50 2,240.95 0.01 0.18 7/1/20 7/6/20 7.00 NIKE INC 97.52 682.62 0.01 0.07 7/1/20 7/6/20 18.00 NIKE INC 97.52 1,755.32 0.01 0.18 7/1/20 7/6/20 4.00 NVIDIA CORP 381.13 1,524.51 0.01 0.04 7/1/20 7/6/20 7.00 NVIDIA CORP 381.13 2,667.90 0.01 0.07 7/1/20 7/6/20 40.00 ORACLE CORP 54.95 2,197.95 0.01 0.40 7/1/20 7/6/20 7.00 PAYPAL HOLDINGS INC 175.70 1,229.87 0.01 0.07 7/1/20 7/6/20 19.00 PAYPAL HOLDINGS INC 175.70 3,338.22 0.01 0.19 7/1/20 7/6/20 12.00 PENUMBRA INC 183.44 2,201.29 0.01 0.12 7/1/20 7/6/20 23.00 PEPSICO INC 132.64 3,050.65 0.01 0.23 7/1/20 7/6/20 22.00 PROOFPOINT 110.92 2,440.35 0.01 0.22 7/1/20 7/6/20 150.00 PURE STORAGE INC 17.16 2,573.94 0.01 1.50 7/1/20 7/6/20 49.00 QUALCOMM INC 90.13 4,416.27 0.01 0.49 7/1/20 7/6/20 25.00 SALESFORCE.COM INC 189.46 4,736.39 0.01 0.25 9/2/20 9/4/20 31.00 SALESFORCE.COM INC 276.11 8,559.26 0.01 0.31 9/2/20 9/4/20 50.00 SALESFORCE.COM INC 276.11 13,805.26 0.01 0.50 7/1/20 7/6/20 20.00 SAREPTA THEROPEUTICS INC 163.61 3,272.20 0.01 0.20 7/1/20 7/6/20 7.00 SERVICENOW INC 409.98 2,869.86 0.01 0.07 7/1/20 7/6/20 2.00 SHERWIN WILLIAMS CO 574.24 1,148.49 0.01 0.02 7/1/20 7/6/20 27.00 SIMON PROPERTY GROUP INC 69.89 1,886.98 0.01 0.27 7/1/20 7/6/20 54.00 SMARTSHEET INC 52.16 2,816.57 0.01 0.54 7/1/20 7/6/20 36.00 STARBUCKS CORP 73.70 2,653.14 0.01 0.36 7/1/20 7/6/20 124.00 SWITCH INC 18.37 2,277.82 0.01 1.24 7/1/20 7/6/20 19.00 SYNOPSYS INC COM 194.35 3,692.56 0.01 0.19 7/1/20 7/6/20 3.00 TESLA MOTORS INC 1,124.99 3,374.98 0.01 0.03 7/1/20 7/6/20 5.00 THERMO FISHER SCIENTIFIC INC 357.29 1,786.46 0.01 0.05 7/1/20 7/6/20 16.00 UNION PACIFIC CORP 166.36 2,661.70 0.01 0.16 Hi bland Capital 41 MANAGEMENT, LLC An Argent Company Sebastian Police Officers' Pension Fund Sales Period Ending 9/30/2020 7/1/20 7/6/20 12.00 UNITED PARCEL SERVICE INC 116.40 1,396.76 0.01 0.12 7/1/20 7/6/20 20.00 UNITEDHEALTH GROUP INC 296.71 5,934.26 0.01 0.20 7/1/20 7/6/20 22.00 UNIVERSAL DISPLAY CORP 147.47 3,244.33 0.01 0.22 7/1/20 7/6/20 17.00 VERTEX PHARMACEUTICALS INC 286.85 4,876.50 0.01 0.17 7/1/20 7/6/20 239.00 VERTIV HOLDINGS CO 13.73 3,281.89 0.01 2.39 7/1/20 7/6/20 44.00 VISA INC 193.88 8,530.53 0.01 0.44 7/1/20 7/6/20 57.00 YUM CHINA HOLDINGS INC 47.79 2,723.96 0.01 0.57 7/1/20 7/6/20 275.00 ZYNGA INC CL A 9.55 2,626.69 0.01 2.75 -------------------------------------------------- 337,383.60 0.01 26.26 Royal Bank of Canada 7/20/20 7/23/20 250,000.00 BANK OF AMERICA CORP 1.898% Due 07-23-31 STIFEL 7/29/20 8/4/20 200,000.00 CHILDREN'S HEATH SYS TX 2.511% Due 08-15-50 8/20/20 8/25/20 250,000.00 JOHNSON & JOHNSON 2.450% Due 09-01-60 8/24/20 8/28/20 300,000.00 NORDEA BANK ABP 0.750% Due 08-28-25 8/3/20 8/6/20 450,000.00 SPIRIT REALTY LP 3.200% Due 02-15-31 STIFEL BB 100.27 250,680.00 101.23 99.54 99.62 99.44 8/5/20 8/10/20 100,000.00 ACTIVISION BLIZZARD 101.40 2.500% Due 09-15-50 8/12/20 8/14/20 300,000.00 CNA FINANCIAL CORP 99.88 2.050% Due 08-15-30 8/10/20 8/24/20 250,000.00 CONCHO RESOURCES INC 100.62 2.400% Due 02-15-31 8/6/20 8/12/20 21,000.00 HOSPITAL SPECIAL SURGERY 101.83 2.667% Due 10-01-50 8/6/20 8/11/20 100,000.00 SERVICENOW INC 100.09 1.400% Due 09-01-30 9/22/20 10/6/20 225,000.00 T-MOBILE USA INC 100.19 3.300% Due 02-15-51 42 202,468.00 248,860.00 298,869.00 447,484.50 1,197,682.00 101,405.00 299,649.00 251,542.50 21,384.93 100,092.00 225,432.00 999,505.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 --------------------- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 --------------------- 0.00 0.00 Hihlmd Capital MANAGEMENT, LLC An Argent Com pary Sebastian Police Officers' Pension Fund Sales Period Ending 9/30/2020 UNASSIGNED 7/13/20 7/13/20 0.20 KONINKLIJKE PHILIPS ELECTRS N V SPON E 47.79 9.54 0.00 0.00 WACHOVIA SECURITIES INC-0 9/21/20 9/21/20 40,000.00 COCA -COLA CO/THE 103.32 41,329.60 0.00 0.00 2.200% Due 05-25-22 -------------------------------------------------- SALES SUBTOTAL 5,608,172.00 0.00 220.83 ---------- ------------------- --------------- ------ 0.00 220.83 Hi Wand Capital 43 MANAGEMENT, LLC An Argent Company r r r 1 I ■ 4 a 6075 Poplar Avenue, Suite 703, Memphis, TN 38119 Tel: 407-839-8440 1 Fax: 407-841-2814 CITY OF SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM ACTUARIAL VALUATION AS OF OCTOBER 1, 2020 CONTRIBUTIONS APPLICABLE TO THE PLAN/FISCAL YEAR ENDING SEPTEMBER 30, 2022 GASB 67/68 DISCLOSURE INFORMATION AS OF SEPTEMBER 30, 2020 FOSTER & FOSTER -. _..._.__ AND CC.--- FOSTER & FOSTER Hh- 7 UAK1C 3 AN V 1-U 04�) V L1 AN 1 December 10, 2020 Mr. Ken Killgore. Administrative Service Director City of Sebastian Re: City of Sebastian Police Officers' Retirement System Dear Ken Killgore: We are pleased to present to the Board this report of the annual actuarial valuation of the City of Sebastian Police Officers' Retirement System. Included are the related results for GASB Statements No. 67 and No. 68. The funding valuation was performed to determine whether the assets and contributions are sufficient to provide the prescribed benefits and to develop the appropriate funding requirements for the applicable plan year. The calculation of the liability for GASB results was performed for the purpose of satisfying the requirements of GASB Statements No. 67 and No. 68. Use of the results for other purposes may not be applicable and may produce significantly different results. The valuations have been conducted in accordance with generally accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued by the Actuarial Standards Board, and reflect laws and regulations issued to date pursuant to the provisions of Chapters 112 and 185, Florida Statutes, as well as applicable federal laws and regulations. In our opinion, the assumptions used in the valuations, as adopted by the Board of Trustees, represent reasonable expectations of anticipated plan experience. The funding percentages and unfunded accrued liability as measured based on the actuarial value of assets will differ from similar measures based on the market value of assets. These measures, as provided, are appropriate for determining the adequacy of future contributions, but may not be appropriate for the purpose of settling a portion or all of its liabilities. Future actuarial measurements may differ significantly from the current measurements presented in this report for a variety of reasons including: changes in applicable laws, changes in plan provisions, changes in assumptions, or plan experience differing from expectations. Due to the limited scope of the valuations, we did not perform an analysis of the potential range of such future measurements. 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 - (239) 433-5500 • Fax (239) 481-0634 • www.foster-foster.com In conducting the valuations, we have relied on personnel, plan design, and asset information supplied by the City of Sebastian, financial reports prepared by the custodian bank, and the actuarial assumptions and methods described in the Actuarial Assumptions section of this report. While we cannot verify the accuracy of all this information, the supplied information was reviewed for consistency and reasonableness. As a result of this review, we have no reason to doubt the substantial accuracy of the information and believe that it has produced appropriate results. This information, along with any adjustments or modifications, is summarized in various sections of this report. The total pension liability, net pension liability, and certain sensitivity information shown in this report are based on an actuarial valuation performed as of October 1, 2019. The total pension liability was rolled -forward from the valuation date to the plan's fiscal year ending September 30, 2020 using generally accepted actuarial principles. It is our opinion that the assumptions used for this purpose are internally consistent, reasonable, and comply with the requirements under GASB No. 67 and No. 68. The undersigned are familiar with the immediate and long-term aspects of pension valuations, and meet the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained herein. All of the sections of this report are considered an integral part of the actuarial opinions. To our knowledge, no associate of Foster & Foster, Inc. working on valuations of the program has any direct financial interest or indirect material interest in the City of Sebastian, nor does anyone at Foster & Foster, Inc. act as a member of the Board of Trustees of the Police Officers' Retirement System. Thus, there is no relationship existing that might affect our capacity to prepare and certify this actuarial report. If there are any questions, concerns, or comments about any of the items contained in this report, please contact us at 239-433-5500. By: Dougla len, EA, MAAA Enrolled Actuary #20-7778 Enclosures Respectfully submitted, Foster & Foster, Inc. By: UqjW_ �*o Amanda M. Brown, ASA, EA, MAAA Enrolled Actuary #20-8780 TABLE OF CONTENTS Section Title Page I Introduction a. Summary of Report 5 b. Changes Since Prior Valuation 6 c. Contribution Impact of Annual Changes 7 d. Comparative Summary of Principal Valuation Results 8 II Valuation Information a. Reconciliation of Unfunded Actuarial Accrued Liabilities 14 b. Detailed Actuarial (Gain)/Loss Analysis 15 c. History of Funding Progress 16 d. Actuarial Assumptions and Methods 17 e. Glossary 20 f. Discussion of Risk 21 g. Partial History of Premium Tax Refunds 24 III Trust Fund 25 IV Member Statistics a. Statistical Data 32 b. Age and Service Distribution 33 C. Valuation Participant Reconciliation 34 V Summary of Current Plan 35 VI Governmental Accounting Standards Board Statements No. 67 and No. 68 Disclosure Information 38 The regular annual actuarial valuation of the City of Sebastian Police Officers' Retirement System, performed as of October 1, 2020, has been completed and the results are presented in this Report. The contribution amounts set forth herein are applicable to the plan/fiscal year ending September 30, 2022. The contribution requirements, compared with those set forth in the October 1, 2019 actuarial valuation report, are as follows: Valuation Date 10/1/2020 10/1/2019 Applicable to Fiscal Year Ending 9/30/2022 9/30/2021 Minimum Required Contribution % of Projected Annual Payroll 40.8% 38.3% Member Contributions (Est.) % of Projected Annual Payroll 8.0% 8.0% City And State Required Contribution % of Projected Annual Payroll 32.8% 30.3% State Contribution (Est.) 1 $208,645 $208,645 % of Projected Annual Payroll 8.1 % 8.1 % City Required Contribution 2 % of Projected Annual Payroll 24.7% 22.2% 1 Represents the amount received in calendar 2020. As per a Mutual Consent Agreement between the Membership and the City, all State Monies received each year will be available to offset the City's required contribution. 2 The required contribution from the combination of City and State sources for the year ending September 30, 2022, is 32.8% of the actual payroll realized in that year. As a budgeting tool, the City may contribute 24.7% of each Member's Salary and then make a one-time adjustment to account for the actual State Monies received. The Minimum Required Contribution reflects an increase compared to the results determined in the October 1, 2019 actuarial valuation report. The increase is largely attributable to unfavorable plan experience on the basis of the plan's actuarial assumptions and was offset in part by a change in assumptions. Sources of actuarial loss included more retirements than expected, an investment return of 6.09% (Actuarial Asset Basis) which fell short of the 7.20% assumption, and less turnover than expected. These losses were offset in part by a gain associated with an average salary increase of 2.64% which fell short of the 5.15% assumption. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 15 Plan Changes There have been no changes in benefits since the prior valuation. Actuarial Assumption/Method Changes As mandated by Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the rates used in Milliman's July 1, 2019 FRS valuation report for special risk employees, with appropriate risk and collar adjustments made based on plan demographics. Additionally, for compliance with Part VII of Chapter 112, Florida Statutes, the payroll growth assumption was lowered from 2.36% to 1.51% in conjunction with this valuation of the Plan. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 16 CONTRIBUTION IMPACT OF ANNUAL CHANGES (1) Contribution Determined as of October 1, 2019 23.2% (2) Summary of Contribution Impact by component: Change in State Contribution Percentage -1.0% Change in Normal Cost Rate 0.6% Change in Administrative Expense Percentage 0.0% Payroll Change Effect on UAAL Amortization 1.7% Investment Return (Actuarial Asset Basis) 0.7% Salary Increases -0.6% Active Decrements 1.5% Inactive Mortality 0.3% Assumption Change -1.0% Other -0.7% Total Change in Contribution 1.5% (3) Contribution Determined as of October 1, 2020 24.7% City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 17 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS New Assump Old Assump 10/1/2020 10/1/2020 10/1/2019 A. Participant Data Actives 40 40 41 Service Retirees 13 13 12 DROP Retirees 1 1 0 Beneficiaries 0 0 1 Disability Retirees 4 4 4 Terminated Vested 10 10 11 Total 68 68 69 Total Annual Payroll $2,774,482 $2,774,482 $2,936,351 Payroll Under Assumed Ret. Age 2,562,563 2,562,563 2,809,537 Annual Rate of Payments to: Service Retirees 676,279 676,279 544,392 DROP Retirees 126,579 126,579 0 Beneficiaries 0 0 7,211 Disability Retirees 78,179 78,179 78,179 Terminated Vested 157,675 157,675 157,675 B. Assets Actuarial Value (AVA)' 17,732,894 17,732,894 16,337,610 Market Value (MVA)' 17,177,800 17,177,800 15,814,119 C. Liabilities Present Value of Benefits Actives Retirement Benefits 13,016,649 13,247,750 15,178,182 Disability Benefits 991,299 945,868 942,731 Death Benefits 55,851 76,365 76,864 Vested Benefits 268,173 270,109 245,304 Refund of Contributions 103,946 103,818 104,822 Service Retirees 7,483,725 7,735,974 5,998,340 DROP Retirees' 1,712,454 1,754,933 0 Beneficiaries 0 0 6,986 Disability Retirees 773,317 744,738 754,929 Terminated Vested 1,612,554 1,636,676 1,533,742 Share Plan Balances ' 0 0 0 Total 26,017,968 26,516,231 24,841,900 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 18 New Assump Old Assump C. Liabilities - (Continued) 10/1/2020 10/1/2020 10/1/2019 Present Value of Future Salaries 21,788,786 21,764,667 21,586,842 Present Value of Future Member Contributions 1,743,103 1,741,173 1,726,947 Normal Cost (Retirement) 418,336 424,904 454,919 Normal Cost (Disability) 76,822 73,453 79,351 Normal Cost (Death) 2,723 3,713 4,033 Normal Cost (Vesting) 20,920 21,067 18,827 Normal Cost (Refunds) 19,255 19,248 19,488 Total Normal Cost 538,056 542,385 576,618 Present Value of Future Normal Costs 4,323,739 4,356,514 4,322,676 Accrued Liability (Retirement) 9,515,380 9,694,067 11,646,283 Accrued Liability (Disability) 413,096 395,955 392,674 Accrued Liability (Death) 33,784 46,421 47,254 Accrued Liability (Vesting) 138,962 140,005 125,386 Accrued Liability (Refunds) 10,957 10,948 13,630 Accrued Liability (Inactives) ' 11,582,050 11,872,321 8,293,997 Share Plan Balances ' 0 0 0 Total Actuarial Accrued Liability (EAN AL) 21,694,229 22,159,717 20,519,224 Unfunded Actuarial Accrued Liability (UAAL) 3,961,335 4,426,823 4,181,614 Funded Ratio (AVA / EAN AL) 81.7% 80.0% 79.6% City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 19 D. Actuarial Present Value of New Assump Old Assump Accrued Benefits 10/1/2020 10/1/2020 10/1 /2019 Vested Accrued Benefits Inactives + Share Plan Balances' 11,582,050 11,872,321 8,293,997 Actives 5,109,473 5,207,680 7,096,540 Member Contributions 1,557,376 1,557,376 1,610,479 Total 18,248,899 18,637,377 17,001,016 Non -vested Accrued Benefits 790,615 803,776 770,397 Total Present Value Accrued Benefits (PVAB) 19,039,514 19,441,153 17,771,413 Funded Ratio (MVA / PVAB) 90.2% 88.4% 89.0% Increase (Decrease) in Present Value of Accrued Benefits Attributable to: Plan Amendments 0 0 Assumption Changes (401,639) 0 Plan Experience 0 1,099,820 Benefits Paid 0 (684,963) Interest 0 1,254,883 Other 0 0 Total (401,639) 1,669,740 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 110 New Assump Old Assump Valuation Date 10/1/2020 10/1/2020 10/1/2019 Applicable to Fiscal Year Ending 9/30/2022 9/30/2022 9/30/2021 E. Pension Cost Normal Cost (with interest) % of Total Annual Payroll' 21.8 21.9 21.3 Administrative Expenses (with interest) % of Total Annual Payroll' 3.0 3.0 3.0 Payment Required to Amortize Unfunded Actuarial Accrued Liability over 26 years (as of 10/1/2020, with interest) % of Total Annual Payroll 2 16.0 16.9 14.0 Minimum Required Contribution % of Total Annual Payroll 2 40.8 41.8 38.3 Expected Member Contributions % of Total Annual Payroll 2 8.0 8.0 8.0 Expected City and State Contribution % of Total Annual Payroll 2 32.8 33.8 30.3 F. Past Contributions Plan Years Ending: 9/30/2020 Total Required Contribution 1,100,769 City and State Requirement 871,442 Actual Contributions Made: Members (excluding buyback) 229,327 City 703,814 State 208,645 Total 1,141,786 G. Net Actuarial (Gain)/Loss 420,974 The asset values and liabilities include accumulated DROP and Share Plan Balances as of 9/30/2020 and 9/30/2019. 2 Contributions developed as of 10/1/2020 are expressed as a percentage of total annual payroll at 10/1/2020 of $2,562,563. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 111 H. Schedule Illustrating the Amortization of the Total Unfunded Actuarial Accrued Liability as of: Projected Unfunded Year Actuarial Accrued Liabilitv 2020 3,961,335 2021 3,822,366 2022 3,666,987 2028 2,421,684 2034 916,455 2040 310,321 2046 0 I. (i) 5 Year Comparison of Actual and Assumed Salary Increases Actual Assumed Year Ended 9/30/2020 2.64% 5.15% Year Ended 9/30/2019 6.84% 7.13% Year Ended 9/30/2018 3.09% 6.97% Year Ended 9/30/2017 7.22% 6.19% Year Ended 9/30/2016 7.49% 6.41% (ii) 5 Year Comparison of Investment Return on Market Value and Actuarial Value Year Ended 9/30/2020 Year Ended 9/30/2019 Year Ended 9/30/2018 Year Ended 9/30/2017 Year Ended 9/30/2016 (111) Average Annual Payroll Growth (a) Payroll as of- (b) Total Increase (c) Number of Years (d) Average Annual Rate Market Value Actuarial Value Assumed 6.04% 6.09% 7.20% 1.79% 7.10% 7.30% 7.35% 6.89% 7.30% 10.90% 6.72% 7.45% 9.39% 5.66% 7.60% 10/1/2020 10/1/2010 $2,562,563 2,205,042 16.21 % 10.00 1.51% City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 112 STATEMENT BY ENROLLED ACTUARY This actuarial valuation was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation. Doug l :H.Lzen, EA, MAAA Enrolledtuary #20-7778 Please let us know when the report is approved by the Board and unless otherwise directed we will provide a copy of the report to the following office to comply with Chapter 112 Florida Statutes: Mr. Keith Brinkman Bureau of Local Retirement Systems Post Office Box 9000 Tallahassee, FL 32315-9000 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 113 RECONCILIATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITIES (1) Unfunded Actuarial Accrued Liability as of October 1, 2019 $4,181,614 (2) Sponsor Normal Cost developed as of October 1, 2019 351,855 (3) Expected administrative expenses for the year ended September 30, 2020 82,282 (4) Expected interest on (1), (2) and (3) 329,372 (5) Sponsor contributions to the System during the year ended September 30, 2020 912,459 (6) Expected interest on (5) 26,815 (7) Expected Unfunded Actuarial Accrued Liability as of September 30, 2020 (1)+(2)+(3)+(4)-(5)-(6) 4,005,849 (8) Change to UAAL due to Assumption Change (465,488) (9) Change to UAAL due to Actuarial (Gain)/Loss 420,974 (10) Unfunded Actuarial Accrued Liability as of October 1, 2020 3,961,335 Type of Date Years 10/1/2020 Amortization Base Established Remaining Amount Amount Method & Benefit 10/1/2002 12 460,059 50,844 Assump Change 10/1/2010 20 144,078 11,516 Benefit Change 10/1/2010 20 7,298 583 Assump Change 10/1/2013 13 (26,693) (2,790) Benefit Change 10/1/2014 24 (3,931) (286) Assump Change 10/1/2015 15 204,836 19,459 Method Change 10/1/2015 15 695,271 66,050 Assump Change 10/1/2016 16 625,410 57,023 Benefit Change 10/1/2016 26 627,392 43,944 Actuarial Loss 10/1/2016 6 144,396 27,462 Actuarial Loss 10/1/2017 7 215,535 36,049 Assump Change 10/1/2017 17 367,096 32,242 Actuarial Loss 10/1/2018 8 71,852 10,786 Actuarial Loss 10/1/2019 14 295,036 29,327 Asmp/Mthd Change 10/1/2019 14 178,214 17,714 Actuarial Loss 10/1/2020 15 420,974 39,992 Assump Change 10/1/2020 15 (465,488) (44,221) 3,961,335 395,694 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 114 DETAILED ACTUARIAL (GAIN)/LOSS ANALYSIS (1) Unfunded Actuarial Accrued Liability (UAAL) as of October 1, 2019 $4,181,614 (2) Expected UAAL as of October 1, 2020 4,005,849 (3) Summary of Actuarial (Gain)/Loss, by component: Investment Return (Actuarial Asset Basis) 183,856 Salary Increases (151,666) Active Decrements 423,800 Inactive Mortality 80,061 Other (115,077) Increase in UAAL due to (Gain)/Loss 420,974 Assumption Changes (465,488) (4) Actual UAAL as of October 1, 2020 $3,961,335 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 115 90.00% 88.00% 86.00% 84.00% 82.00% 80.00% 78.00% 76.00% 74.00% HISTORY OF FUNDING PROGRESS 2015 2016 2017 2018 2019 2020 ❑ Funded Ratio (Actuarial Value of Assets / Actuarial Accrued Liability) City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 116 r:T"010NKIWNI IR1181UT1910Is] .fy:1.0 UTII1 Is IQ 0 Mortality Rate Healthy Active Lives: Female: PubS.H-2010 (Below Median) for Employees, set forward one year. Prior year assumption: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB. Male: PubS.H-2010 (Below Median) for Employees, set forward one year. Prior year assumption: RP2000 Generational, 10% Combined Healthy White Collar / 90% Combined Healthy Blue Collar, Scale BB. Healthy Retiree Lives: Female: PubS.H-2010 for Healthy Retirees, set forward one year. Prior year assumption: RP2000 Generational, 100% Annuitant White Collar, Scale BB. Male: PubS.H-2010 (Below Median) for Healthy Retirees, set forward one year. Prior year assumption: RP2000 Generational, 10% Annuitant White Collar / 90% Annuitant Blue Collar, Scale BB. Beneficiary Lives: Female: PubG.H-2010 (Below Median) for Healthy Retirees. Prior year assumption: RP2000 Generational, 100% Annuitant White Collar, Scale BB. Male: PubG.H-2010 (Below Median) for Healthy Retirees, set back one year. Prior year assumption: RP2000 Generational, 10% Annuitant White Collar / 90% Annuitant Blue Collar, Scale BB. Disabled Lives: 80% PubG.H-2010 for Disabled Retirees / 20% PubS.H- 2010 for Disabled Retirees. Prior year assumption (Female): 60% RP2000 Disabled Female set forward two years / 40% Annuitant White Collar with no setback, no projection scale Prior year assumption (Male): 60% RP2000 Disabled Male setback four years / 40% Annuitant White Collar with no setback, no projection scale. All rates are projected generationally with Mortality Improvement Scale MP-2018. The described mortality assumption rates were mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of assumptions used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in Milliman's July 1, 2019 FRS valuation report for special risk employees, with appropriate risk and collar adjustments made based on plan demographics. This assumption sufficiently accommodates future mortality improvements. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 117 Interest Rate 7.20% per year compounded annually, net of investment related expenses. This is supported by the target asset allocation of the trust and the expected long-term return by asset class. Salary Increases Credited Service Assumption < 1 Year 16.0% Years 1 - 3 6.5% Years 4 - 13 5.8% 14 Years and Greater 3.8% This assumption was approved in conjunction with an actuarial experience study dated September 13, 2019. Payroll Growth 1.51% (prior year 2.36%) for purposes of amortizing the Unfunded Actuarial Accrued Liability. This assumption cannot exceed the ten-year average payroll growth, in compliance with Part VII of Chapter 112, Florida Statutes. Administrative Expenses Final Salary Load Termination Rate Retirement Rates $75,233 annually, based on the average of actual expenses incurred in the prior two fiscal years. Final salary is increased with a load assumption as shown below based on credited service on 10/l/2014: Service on 10/1/2014 Load Assumption 5 or more years 20.0% More than 2, less than 5 years 10.0% Less than 2 years 0.0% The assumed rates of termination are displayed below: Credited Service Assumption 0-2 15.0% 3 — 14 4.0% 15 + 0.0% This assumption was approved in conjunction with an actuarial experience study dated September 13, 2019. Members with less than 25 years of credited service are assumed to retire at the following rates: AAe Assumption 50 30% 51 — 54 5% 55 - 56 50% 57 100% Members with at least 25 years of credited service are assumed to retire immediately. This assumption was approved in conjunction with an actuarial experience study dated September 13, 2019. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 118 Disabilitv Rate Age -based rates with increasing probability of disablement at higher ages. A sample of rates are shown below: Age Assumption 30 0.24% 40 0.42% 50 1.08% 60 5.40% Additionally, it is assumed that 75% of disablements and active Member deaths are service -related. This assumption was approved in conjunction with an actuarial experience study dated September 13, 2019. Funding Method Entry Age Normal Actuarial Cost Method (level percent of pay). A half -year of interest load at the current assumption of 7.2% is used for determining the minimum required contribution. Actuarial Asset Method All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a four-year period. Amortization Method New UAAL amortization amounts are amortized over the following amortization periods: Experience: 15 Years. Assumption/Method Changes: 15 Years. Benefit Changes: 15 Years. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 119 ,fit�3.XY:\:i•1 Actuarial Value of Assets is the asset value used in the valuation to determine contribution requirements. It represents the plan's Market Value of Assets (see below), with adjustments according to the plan's Actuarial Asset Method. These adjustments produce a "smoothed" value that is likely to be less volatile from year to year than the Market Value of Assets. Entry Ate Normal Cost Method - Under this method, the normal cost is the sum of the individual normal costs for all active participants. For an active participant, the normal cost is the participant's normal cost accrual rate, multiplied by the participant's current compensation. (a) The normal cost accrual rate equals: i. the present value of future benefits for the participant, determined as of the participant's entry age, divided by ii. the present value of the compensation expected to be paid to the participant for each year of the participant's anticipated future service, determined as of the participant's entry age. (b) In calculating the present value of future compensation, the salary scale is applied both retrospectively and prospectively to estimate compensation in years prior to and subsequent to the valuation year based on the compensation used for the valuation. (c) The accrued liability is the sum of the individual accrued liabilities for all participants and beneficiaries. A participant's accrued liability equals the present value, at the participant's attained age, of future benefits less the present value at the participant's attained age of the individual normal costs payable in the future. A beneficiary's accrued liability equals the present value, at the beneficiary's attained age, of future benefits. The unfunded accrued liability equals the total accrued liability less the actuarial value of assets. (d) Under this method, the entry age used for each active participant is the participant's age at the time he or she would have commenced participation if the plan had always been in existence under current terms, or the age as of which he or she first earns service credits for purposes of benefit accrual under the current terms of the plan. Market Value of Assets is the fair market value of plan assets as of the valuation date. This amount may be adjusted to produce an Actuarial Value of Assets for plan funding purposes. Normal (Current Year's) Cost is the current year's cost for benefits yet to be funded. Under the Entry Age Normal cost method, it is determined for each participant as the present value of future benefits, determined as of the Member's entry age, amortized as a level percentage of compensation over the anticipated number of years of participation, determined as of the entry age. Present Value of Benefits is the single sum value on the valuation date of all future benefits to be paid to current plan participants. Total Annual Pavroll is the projected annual rate of pay for the fiscal year beginning on the valuation date of all covered Members. Total Required Contribution is equal to the Normal Cost plus an amount sufficient to amortize the Unfunded Accrued Liability over no more than 30 years. The required amount is adjusted for interest according to the timing of contributions during the year. Unfunded Actuarial Accrued Liabilitv (UAAL) is the difference between the actuarial accrued liability (described above) and the Actuarial Value of Assets. Under the Entry Age Normal Actuarial Cost Method, an actuarial gain or loss, based on actual versus expected UAAL, is determined in conjunction with each valuation of the plan. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 120 ID3Kfei&vMEe]0RLl114 ASOP No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions, states that the actuary should identify risks that, in the actuary's professional judgment, may reasonably be anticipated to significantly affect the plan's future financial condition. Throughout this report, actuarial results are determined using various actuarial assumptions. These results are based on the premise that all future plan experience will align with the plan's actuarial assumptions; however, there is no guarantee that actual plan experience will align with the plan's assumptions. It is possible that actual plan experience will differ from anticipated experience in an unfavorable manner that will negatively impact the plan's funded position. Below are examples of ways in which plan experience can deviate from assumptions and the potential impact of that deviation. Typically, this results in an actuarial gain or loss representing the current -year financial impact on the plan's unfunded liability of the experience differing from assumptions; this gain or loss is amortized over a period of time determined by the plan's amortization method. When assumptions are selected that adequately reflect plan experience, gains and losses typically offset one another in the long term, resulting in a relatively low impact on the plan's contribution requirements associated with plan experience. When assumptions are too optimistic, losses can accumulate over time and the plan's amortization payment could potentially grow to an unmanageable level. • Investment Return: When the rate of return on the Actuarial Value of Assets falls short of the assumption, this produces a loss representing assumed investment earnings that were not realized. Further, it is unlikely that the plan will experience a scenario that matches the assumed return in each year as capital markets can be volatile from year to year. Therefore, contribution amounts can vary in the future. Salary Increases: When a plan participant experiences a salary increase that was greater than assumed, this produces a loss representing the cost of an increase in anticipated plan benefits for the participant as compared to the previous year. The total gain or loss associated with salary increases for the plan is the sum of salary gains and losses for all active participants. Pavroll Growth: The plan's payroll growth assumption, if one is used, causes a predictable annual increase in the plan's amortization payment in order to produce an amortization payment that remains constant as a percentage of payroll if all assumptions are realized. If payroll does not increase according to the plan's payroll growth assumption, the plan's amortization payment can increase significantly as a percentage of payroll even if all assumptions other than the payroll growth assumption are realized. Demo2ranhic Assumptions: Actuarial results take into account various potential events that could happen to a plan participant, such as retirement, termination, disability, and death. Each of these potential events is assigned a liability based on the likelihood of the event and the financial consequence of the event for the plan. Accordingly, actuarial liabilities reflect a blend of financial consequences associated with various possible outcomes (such as retirement at one of various possible ages). Once the outcome is known (e.g. the participant retires) the liability is adjusted to reflect the known outcome. This adjustment produces a gain or loss depending on whether the outcome was more or less favorable than other outcomes that could have occurred. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 121 Impact of Plan Maturitv on Risk For newer pension plans, most of the participants and associated liabilities are related to active members who have not yet reached retirement age. As pension plans continue in operation and active members reach retirement ages, liabilities begin to shift from being primarily related to active members to being shared amongst active and retired members. Plan maturity is a measure of the extent to which this shift has occurred. It is important to understand that plan maturity can have an impact on risk tolerance and the overall risk characteristics of the plan. For example, closed plans with a large amount of retired liability do not have as long of a time horizon to recover from losses (such as losses on investments due to lower than expected investment returns) as plans where the majority of the liability is attributable to active members. For this reason, less tolerance for investment risk may be warranted for highly mature closed plans with a substantial inactive liability. Similarly, mature closed plans paying substantial retirement benefits resulting in a small positive or net negative cash flow can be more sensitive to near term investment volatility, particularly if the size of the fund is shrinking, which can result in less assets being available for investment in the market. To assist with determining the maturity of the plan, we have provided some relevant metrics in the table following titled "Plan Maturity Measures and Other Risk Metrics". Highlights of this information are discussed below: • The Support Ratio, determined as the ratio of active to inactive members, has decreased from 450.0% on October 1, 2010 to 166.7% on October 1, 2020, indicating that the plan has been maturing during the period. The Accrued Liability Ratio, determined as the ratio of the Inactive Accrued Liability, which is the liability associated with members who are no longer employed but are due a benefit from the plan, to the Total Accrued Liability, is 53.4%. With a plan of this maturity, losses due to lower than expected investment returns or demographic factors may result in larger increases in contribution requirements than would be needed for a less mature plan. Please note Chapter 112, Florida Statutes, requires that the plan sponsor contributes the minimum required contribution; thus, there is minimal solvency risk to the plan. • The Funded Ratio, determined as the ratio of the Actuarial Value of Assets to the Total Accrued Liability, has increased from 68.1% to 81.7% during the period October 1, 2010 to October 1, 2020. • The Net Cash Flow Ratio, determined as the ratio of the Net Cash Flow (contributions minus benefit payments and administrative expenses) to the Market Value of Assets, decreased from 9.6% on October 1, 2010 to 2.3% on October 1, 2020. The current Net Cash Flow Ratio of 2.3% indicates that contributions are generally in excess of the plan's benefit payments and administrative expenses. It is important to note that the actuary has identified the risks in this section as the most significant risks based on the characteristics of the plan and the nature of the project, however, it is not an exhaustive list of potential risks that could be considered. Additional advanced modeling, as well as the identification of additional risks, can be provided at the request of the audience addressed on page 2 of this report. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 122 PLAN MATURITY MEASURES AND OTHER RISK METRICS Support Ratio Total Actives Total Inactives ' Actives / Inactives ' Asset Volatility Ratio Market Value of Assets (MVA) Total Annual Payroll MVA / Total Annual Payroll Accrued Liabilitv (AL) Ratio Inactive Accrued Liability Total Accrued Liability (EAN) Inactive AL / Total AL 10/1/2010 10/1/2015 10/1/2019 10/1/2020 36 34 41 40 8 16 23 24 450.0% 212.5% 178.3% 166.7% 7,086,302 11,284,026 15,814,119 17,177,800 2,205,042 2,221,517 2,936,351 2,774,482 321.4% 507.9% 538.6% 619.1% 1,835,269 10,401,892 17.6% 6,059,349 13,652,245 44.4% 8,293,997 20,519,224 40.4% 11,582,050 21,694,229 53.4% Funded Ratio Actuarial Value of Assets (AVA) 7,086,302 11,978,701 16,337,610 17,732,894 Total Accrued Liability (EAN) 10,401,892 13,652,245 20,519,224 21,694,229 AVA / Total Accrued Liability (EAN) 68.1% 87.7% 79.6% 81.7% Net Cash Flow Ratio Net Cash Flow 2 678,698 81,412 370,301 388,833 Market Value of Assets (MVA) 7,086,302 11,284,026 15,814,119 17,177,800 Ratio 9.6% 0.7% 2.3% 2.3% ' Excludes terminated participants awaiting a refund of member contributions. 2 Determined as total contributions minus benefit payments and administrative expenses. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 123 Received During Fiscal Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 PARTIAL HISTORY OF PREMIUM TAX REFUNDS Amount 32,503.00 36,089.00 39,753.00 46,790.00 112,773.00 68,646.00 82,877.00 92,713.77 106,715.77 117,621.48 117,621.48 117,621.48 122,800.00 137,781.90 134,851.83 133,477.13 139,262.54 145,960.60 147,867.54 145,700.02 169,027.15 168,628.24 188,923.04 198,770.00 208,644.92 Increase from Previous Year 11.0% 10.2% 17.7% 141.0% -39.1% 20.7% 11.9% 15.1% 10.2% 0.0% 0.0% 4.4% 12.2% -2.1% -1.0% 4.3% 4.8% 1.3% -1.5% 16.0% -0.2% 12.0% 5.2% 5.0% City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 124 STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2020 ASSETS COST VALUE MARKET VALUE Cash and Cash Equivalents: Short Term Investments 1,263,887.22 1,263,887.22 Cash 74.09 74.09 Total Cash and Equivalents 1,263,961.31 1,263,961.31 Receivables: Investment Income 24,159.48 24,159.48 Total Receivable 24,159.48 24,159.48 Investments: U. S. Bonds and Bills 63,307.41 75,893.08 Federal Agency Guaranteed Securities 1,313,730.48 1,401,245.05 Corporate Bonds 1,932,972.13 2,027,149.01 Municipal Obligations 205,731.96 221,168.06 Stocks 9,950,391.69 11,423,961.41 Mutual Funds: Equity 15,202.25 15,431.50 Pooled/Common/Commingled Funds: Real Estate 650,000.00 724,831.00 Total Investments 14,131,335.92 15,889,679.11 Total Assets 15,419,456.71 17,177,799.90 LIABILITIES Total Liabilities 0.00 0.00 NET POSITION RESTRICTED FOR PENSIONS 15,419,456.71 17,177,799.90 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 125 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2020 Market Value Basis ADDITIONS Contributions: Member City State Total Contributions Investment Income: Net Realized Gain (Loss) (38,457.80) Unrealized Gain (Loss) 768,455.92 Net Increase in Fair Value of Investments Interest & Dividends Less Investment Expense' Net Investment Income Total Additions DEDUCTIONS Distributions to Members: Benefit Payments Lump Sum DROP Distributions Refunds of Member Contributions Total Distributions Administrative Expense Total Deductions Net Increase in Net Position NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year End of the Year 229,326.84 703,814.00 208,644.92 729,998.12 365,149.90 (120,301.08) 673,747.81 0.00 11,214.76 'Investment related expenses include investment advisory, custodial and performance monitoring fees. 1,141,785.76 974,846.94 2,116,632.70 684,962.57 67,989.50 752,952.07 1,363,680.63 15,814,119.27 17,177,799.90 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 126 ACTUARIAL ASSET VALUATION September 30, 2020 Actuarial Assets for funding purposes are developed by recognizing the total actuarial investment gain or loss for each Plan Year over a four year period. In the first year, 25% of the gain or loss is recognized. In the second year 50%, in the third year 75%, and in the fourth year 100% of the gain or loss is recognized. The actuarial investment gain or loss is defined as the actual return on investments minus the actuarial assumed investment return. Actuarial Assets shall not be less than 80% nor greater than 120% of Market Value of Assets. Gains/(Losses) Not Yet Recognized Plan Year Amounts Not Yet Recognized by Valuation Year Ending Gain/Loss 2020 2021 2022 2023 09/30/2017 435,954 0 0 0 09/30/2018 1,392 348 0 0 09/30/2019 (844,232) (422,116) (211,058) 0 09/30/2020 (177,768) (133,326) (88,884) (44,442) Total (555,094) (299,942) (44,442) Development of Investment Gain/(Loss) Market Value of Assets, 09/30/2019 Contributions Less Benefit Payments and Admin Expenses Expected Investment Earnings* Actual Net Investment Earnings 2020 Actuarial Investment Gain/(Loss) *Expected Investment Earnings = 0.072 * (15,814,119 + 0.5 * 388,834) Development of Actuarial Value of Assets (1) Market Value of Assets, 09/30/2020 (2) Gains/(Losses) Not Yet Recognized (3) Actuarial Value of Assets, 09/30/2020, (1) - (2) (A) 09/30/2019 Actuarial Assets: (I) Net Investment Income: 1. Interest and Dividends 2. Realized Gain (Loss) 3. Unrealized Gain (Loss) 4. Change in Actuarial Value 5. Investment Expenses Total (B) 09/30/2020 Actuarial Assets: Actuarial Asset Rate of Return = 2U(A+B-I): Market Value of Assets Rate of Return: Actuarial Gain/(Loss) due to Investment Return (Actuarial Asset Basis) 10/01/2020 Limited Actuarial Assets: 15,814,119 388,834 1,152,615 974,847 (177,768) 17,177,800 (555,094) 17,732,894 16,337,610 365,150 (38,458) 768,456 31,603 (120,301) 1,006,450 17,732,894 6.09% 6.04% (183,856) 17,732,894 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 127 CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS SEPTEMBER 30, 2020 Actuarial Asset Basis REVENUES Contributions: Member City State Total Contributions Earnings from Investments: Interest & Dividends Net Realized Gain (Loss) Unrealized Gain (Loss) Change in Actuarial Value Total Earnings and Investment Gains EXPENDITURES Distributions to Members: Benefit Payments Lump Sum DROP Distributions Refunds of Member Contributions Total Distributions Expenses: Investment related' Administrative Total Expenses Change in Net Assets for the Year Net Assets Beginning of the Year Net Assets End of the Year2 229,326.84 703,814.00 208,644.92 365,149.90 (38,457.80) 768,455.92 31,603.00 673,747.81 0.00 11,214.76 120,301.08 67,989.50 'Investment related expenses include investment advisory, custodial and performance monitoring fees. 2Net Assets may be limited for actuarial consideration. 1,141,785.76 1,126,751.02 684,962.57 188,290.58 1,395,283.63 16,337,610.27 17,732,893.90 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 128 DEFERRED RETIREMENT OPTION PLAN ACTIVITY October 1, 2019 to September 30, 2020 Beginning of the Year Balance 0.00 Plus Additions 116,030.97 Investment Return Earned 752.44 Less Distributions 0.00 End of the Year Balance 116,783.41 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 129 CITY CONTRIBUTIONS IN EXCESS OF MINIMUM REQUIREMENT FOR THE FISCAL YEAR ENDED (FYE) SEPTEMBER 30, 2020 (1) Total Required Contribution Rate (2) Pensionable Payroll Derived from Member Contributions (3) Total Required Contribution (1) x (2) (4) Less Actual Member Contributions (5) Less Allowable State Contribution (6) Equals Required City Contribution for Fiscal 2020 (7) Less 2019 Prepaid Contribution (8) Less Actual City Contributions (9) City Contributions in Excess of Minimum Requirement Applied to Reduce Unfunded Actuarial Accrued Liability as of September 30, 2020 3 8.4% $2,866,585.50 1,100,768.83 (229,326.84) (208,644.92) 662,797.07 0.00 (703,814.00) ($41,016.93) City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 130 HISTORY OF ASSET VALUES AND INVESTMENT RETURNS History of Asset Values (Market Value vs. Actuarial Value) 20,000,000 18,000,000 16,000,000 / 14,000,000 12,000,000 — - 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 f Actuarial Value of Assets —*--Market Value of Assets 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% —� -2.00% -4.00% History of Investment Returns (Market Value vs. Actuarial Value) 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 ❑ Return on Actuarial Value of Assets ❑ Return on Market Value of Assets City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 131 STATISTICAL DATA 10/1/2017 10/1 /2018 10/1 /2019 10/1/2020 Actives Number 37 39 41 40 Average Current Age 40.5 41.2 41.3 40.9 Average Age at Employment 29.8 31.1 30.8 30.9 Average Past Service 10.7 10.1 10.5 10.0 Average Annual Salary $71,343 $69,415 $71,618 $69,362 Service Retirees Number 9 12 12 13 Average Current Age 62.9 61.0 62.0 62.2 Average Annual Benefit $51,364 $45,366 $45,366 $52,021 DROP Retirees Number 0 0 0 1 Average Current Age N/A N/A N/A 56.2 Average Annual Benefit N/A N/A N/A $126,579 Beneficiaries Number 1 1 1 0 Average Current Age 67.7 68.7 69.7 N/A Average Annual Benefit $7,211 $7,211 $7,211 N/A Disability Retirees Number 2 3 4 4 Average Current Age 69.7 56.9 58.5 59.5 Average Annual Benefit $12,142 $19,184 $19,545 $19,545 Terminated Vested Number 12 10 11 10 Average Current Age 48.8 49.9 50.9 51.9 Average Annual Benefit' $26,769 $26,279 $26,279 $26,279 1 The Average Annual Benefit excludes participants awaiting a refund of contributions. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 132 AGE AND SERVICE DISTRIBUTION PAST SERVICE AGE 0 1 2 3 4 5-9 10-14 15-19 20-24 25-29 30+ Total 15 - 19 0 20 - 24 1 1 2 25 - 29 1 1 1 3 30-34 1 2 1 3 1 8 35 - 39 2 2 1 5 40 - 44 1 2 2 1 1 7 45 - 49 1 1 1 3 6 50 - 54 1 1 1 2 1 6 55 - 59 1 1 2 60-64 1 1 65+ 0 Total 3 1 7 4 1 6 7 5 5 1 0 40 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 133 VALUATION PARTICIPANT RECONCILIATION 1. Active lives a. Number in prior valuation 10/1/2019 41 b. Terminations i. Vested (partial or full) with deferred annuity 0 ii. Vested in refund of member contributions only 0 iii. Refund of member contributions or full lump sum distribution received (2) c. Deaths i. Beneficiary receiving benefits 0 ii. No future benefits payable 0 d. Disabled 0 e. Retired (1) f. DROP g. Continuing participants 37 h. New entrants 3 i. Total active life participants in valuation 40 2. Non -Active lives (including beneficiaries receiving benefits) Service Retirees, Vested Receiving Receiving Vested Vested Receiving DROP Death Disability (Deferred (Due Benefits Benefits Benefits Benefits Annuity) Refund) Total a. Number prior valuation 12 0 1 4 6 5 28 Retired 1 0 0 0 0 0 1 DROP 0 1 0 0 0 0 1 Vested (Deferred Annuity) 0 0 0 0 0 0 0 Vested (Due Refund) 0 0 0 0 0 0 0 Hired/Terminated in Same Year 0 0 0 0 0 0 0 Death, With Survivor 0 0 0 0 0 0 0 Death, No Survivor 0 0 0 0 0 0 0 Disabled 0 0 0 0 0 0 0 Refund of Contributions 0 0 0 0 0 (1) (1) Rehires 0 0 0 0 0 0 0 Expired Annuities 0 0 (1) 0 0 0 (1) Data Corrections 0 0 0 0 0 0 0 b. Number current valuation 13 1 0 4 6 4 28 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 134 SUMMARY OF CURRENT PLAN (Through Ordinance 0-17-03) Elijzibility Full-time employees who are classified as full-time sworn Police Officers participate in the System as a condition of employment. Credited Service Total years and fractional parts of years of employment with the City as a Police Officer. Salary Total cash compensation reportable on Form W-2, paid during the fiscal year, for services rendered to the City as a Police Officer. For Credited Service after July 1, 2011, annual overtime shall not exceed 300 hours. Additionally, payment for unused sick and annual leave time shall not be considered pensionable for hours accrued after July 1, 2011. Also, payment for overtime and unused sick and annual leave time at the time of termination shall not exceed the amounts in place on July 1, 2011. Average Final Compensation Member Contributions Citv and State Contributions Normal Retirement Date Benefit Members hired prior to 4/11/12 Members hired after 4/10/12 Form of Benefit Earlv Retirement Eligibility Benefit Average Earnings for the highest 5 years during the 10 years immediately preceding retirement or termination. 8% of Salary. Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, over a period not exceeding 30 years. Earlier of 1) age 55 and 10 years of Credited Service, or 2) age 52 and 25 years of Credited Service. 3.0% of Average Final Compensation for each year of Credited Service. 2.0% of Average Final Compensation for each year of Credited Service through September 30, 2016, plus 3.0% of Average Final Compensation for years of Credited Service after September 30, 2016. Ten Year Certain and Life Annuity (options available). Age 50 and 10 Years of Credited Service. Accrued benefit, reduced 3% per year prior to Normal Retirement. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 135 Vestin Schedule 100% after 10 years of Credited Service. Benefit Amount Member will receive the vested portion of his (her) accrued benefit payable at the otherwise Normal Retirement Date. Deferred Retirement Option Plan Eligibility Satisfaction of Normal Retirement requirements. Participation Not to exceed 60 months. Rate of Return 1.30% annual interest, compounded monthly Form of Distribution Lump sum (options available) at termination of employment. Disabilitv Eligibility Service Incurred Covered from Date of Employment. Non -Service Incurred 10 years of Credited Service. Benefit Service Incurred Accrued benefit, but not less than 42% of Average Final Compensation. Non -Service Incurred Accrued benefit, but not less than 25% of Average Final Compensation. Duration Payable for life, with ten years certain, or until recovery (as determined by the Board). Death Benefits Pre -Retirement Non -vested Refund of accumulated contributions. Vested Accrued benefit payable to Beneficiary for 10 years at otherwise Normal Retirement Date. Post -Retirement Benefits payable to beneficiary in accordance with option selected at retirement. Cost -of -Living Aduustment A 1% automatic cost -of -living adjustment (COLA), beginning on the first October 1 following age 58 for Members retiring after August 23, 2017 with at least 15 years of Credited Service. The COLA is applicable to all categories of retirement, including Normal, Early, Vesting, Disability, and pre -retirement death Beneficiaries. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 136 Board of Trustees a. Two City Council appointees, b. Two Members of the System, elected by the Membership, and c. Fifth Trustee elected by other 4 and appointed by City Council. Supplemental Benefit: Chapter 185 Share Accounts Effective September 30, 2015, excess Premium tax monies received pursuant to Chapter 185, Florida Statutes will be allocated to individual Member share accounts based on years of Credited Service. Excess Monies The current Mutual Consent between the City and Membership allows the City to utilize all future Chapter 185 Premium tax monies to assist with Plan funding. Therefore, no excess monies are available for Share Plan allocation. Investment Earnings Expenses Plan earnings, net of investment -related expenses. Based on expenses related to administration of the Share Plan, debited against individual accounts on a pro-rata basis. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 137 GASB 67 STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2020 ASSETS MARKET VALUE Cash and Cash Equivalents: Short Term Investments 1,263,887 Cash 74 Total Cash and Equivalents 1,263,961 Receivables: Investment Income 24,160 Total Receivable 24,160 Investments: U. S. Bonds and Bills 75,893 Federal Agency Guaranteed Securities 1,401,245 Corporate Bonds 2,027,149 Municipal Obligations 221,168 Stocks 11,423,961 Mutual Funds: Equity 15,432 Real Estate 724,831 Total Investments 15,889,679 Total Assets 17,177,800 Total Liabilities 0 NET POSITION RESTRICTED FOR PENSIONS 17,177,800 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 1 38 GASB 67 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2020 Market Value Basis ADDITIONS Contributions: Member City State Total Contributions Investment Income: Net Increase in Fair Value of Investments Interest & Dividends Less Investment Expense' Net Investment Income Total Additions DEDUCTIONS Distributions to Members: Benefit Payments Refunds of Member Contributions Total Distributions Administrative Expense Total Deductions Net Increase in Net Position NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year End of the Year 229,327 703,814 208,645 729,998 365,150 (120,301) 673,748 11,215 'Investment related expenses include investment advisory, custodial and performance monitoring fees. 1,141,786 974,847 2,116,633 684,963 67,989 752,952 1,363,681 15,814,119 17,177,800 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 139 GASB 67 NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30, 2020) Plan Administration The Plan is a single -employer defined benefit pension plan administered by the Plan's Board of Trustees comprised of: a. Two City Council appointees, b. Two Members of the System, elected by the Membership, and c. Fifth Trustee elected by other 4 and appointed by City Council. Plan Membership as of October 1, 2019: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 17 Inactive Plan Members Entitled to But Not Yet Receiving Benefits 11 Active Plan Members 41 69 Benefits Provided The Plan provides retirement, termination, disability and death benefits. A summary of the benefit provisions can be found in the October 1, 2019 Actuarial Valuation Report for the City of Sebastian Police Officers' Retirement System prepared by Foster & Foster Actuaries and Consultants. Contributions Member Contributions: 8% of Salary. City and State Contributions: Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, over a period not exceeding 30 years. Investment Policy: The following was the Board's adopted asset allocation policy as of September 30, 2020: Asset Class Target Allocation Domestic Equity 52.50% International Equity 12.50% Fixed Income 25.00% Real Estate 5.00% MLPs 5.00% Total 100.00% Concentrations: The Plan did not hold investments in any one organization that represent 5 percent or more of the Pension Plan's Fiduciary Net Position. Rate of Return: For the year ended September 30, 2020, the annual money -weighted rate of return on Pension Plan investments, net of Pension Plan investment expense, was 6.04 percent. The money -weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Deferred Retirement Option Proeram Eligibility: Satisfaction of Normal Retirement requirements. Participation: Not to exceed 60 months. Rate of Return: 1.30% annual interest, compounded monthly. The DROP balance as September 30, 2020 is $116,783. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 140 GASB 67 NET PENSION LIABILITY OF THE SPONSOR The components of the Net Pension Liability of the Sponsor on September 30, 2020 were as follows: Total Pension Liability $ 21,233,850 Plan Fiduciary Net Position $ (17,177,800) Sponsor's Net Pension Liability $ 4,056,050 Plan Fiduciary Net Position as a percentage of Total Pension Liability 80.90% Actuarial Assumptions: The Total Pension Liability was determined by an actuarial valuation as of October 1, 2019 updated to September 30, 2020 using the following actuarial assumptions: Inflation 2.30% Salary Increases Service based Discount Rate 7.20% Investment Rate of Return 7.20% Mortality Rate Healthy Active Lives: Female: PubS.H-2010 (Below Median) for Employees, set forward one year. Male: PubS.H-2010 (Below Median) for Employees, set forward one year. Mortality Rate Healthy Retiree Lives: Female: PubS.H-2010 for Healthy Retirees, set forward one year. Male: PubS.H-2010 (Below Median) for Healthy Retirees, set forward one year. Mortality Rate Beneficiary Lives: Female: PubG.H-2010 (Below Median) for Healthy Retirees. Male: PubG.H-2010 (Below Median) for Healthy Retirees, set back one year. Mortality Rate Disabled Lives: 80% PubG.H-2010 for Disabled Retirees / 20% PubS.H-2010 for Disabled Retirees. All rates are projected generationally with Mortality Improvement Scale MP-2018. The described mortality assumption rates were mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of assumptions used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in Milliman's July 1, 2019 FRS valuation report for special risk employees, with appropriate risk and collar adjustments made based on plan demographics. This assumption sufficiently accommodates future mortality improvements. The most recent actuarial experience study used to review the other significant assumptions was dated September 13, 2019. The Long -Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class. For 2020 the inflation rate assumption of the investment advisor was 1.80%. These ranges are combined to produce the Long -Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 141 GASB 67 Best estimates of geometric real rates of return for each major asset class included in the Pension Plan's target asset allocation as of September 30, 2020 are summarized in the following table: Asset Class Domestic Equity International Equity Fixed Income Real Estate MLPs Long Term Expected Real Rate of Return' 5.33% 4.31 % 1.40% 4.80% 4.70% ' Source: Morgan Stanley. Based on secular annualized return and volatility estimates are based on a 20-year-plus time horizon. Please note that long term expected return of the total portfolio is greater than simply multiplying each of the above "Long Term Expected Real Rate of Returns" by their target allocation % and adding them together. Not only is the time horizon longer for an actuarial valuation relative to the time horizon over which the above projected returns were generated, but also there is an additional correlation resulting from a diversified portfolio that will provide additional returns. Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.20 percent. The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long -Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Current 1% Decrease Discount Rate 1% Increase 6.20% 7.20% 8.20% Sponsor's Net Pension Liability $ 6,715,749 $ 4,056,050 $ 19845,807 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 142 GASB 67 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 2 Fiscal Years 09/30/2020 09/30/2019 Total Pension Liability Service Cost 600,789 609,880 Interest 1,451,768 1,371,857 Changes of benefit terms - - Differences between Expected and Actual Experience 408,904 (25,912) Changes of assumptions (447,786) 22,520 Contributions - Buy Back - 52,749 Benefit Payments, including Refunds of Employee Contributions (684,963) (617,282) Net Change in Total Pension Liability 1,328,712 1,413,812 Total Pension Liability - Beginning 19,905,138 18,491,326 Total Pension Liability - Ending (a) $ 21,233,850 $ 19,905,138 Plan Fiduciary Net Position Contributions - Employer 703,814 595,045 Contributions - State 208,645 198,770 Contributions - Employee 229,327 223,495 Contributions - Buy Back - 52,749 Net Investment Income 974,847 276,498 Benefit Payments, including Refunds of Employee Contributions (684,963) (617,282) Administrative Expense (67,989) (82,476) Net Change in Plan Fiduciary Net Position 1,363,681 646,799 Plan Fiduciary Net Position - Beginning 15,814,119 15,167,320 Plan Fiduciary Net Position - Ending (b) $ 17,177,800 $ 15,814,119 Net Pension Liability - Ending (a) - (b) $ 4,056,050 $ 4,091,019 Plan Fiduciary Net Position as a percentage of the Total Pension Liability 80.90% 79.45% Covered Payroll $ 2,866,586 $ 2,793,692 Net Pension Liability as a percentage of Covered Payroll 141.49% 146.44% Notes to Schedule of Changes in Net Pension Liabilitv and Related Ratios Changes of assumptions: For measurement date 09/30/2020, as mandated by Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the rates used in Milliman's July 1, 2019 FRS valuation report for special risk employees, with appropriate risk and collar adjustments made based on plan demographics. For measurement date 09/30/2019, amounts reported as changes of assumptions resulted of an Experience Study dated September - The investment return assumption was decreased from 7.30% to 7.20% per year compounded annually, net of investment related expenses. - Based on a study of actual versus expected experience for the 10-year period ending September 30, 2018, the following changes to demographic assumptions were made: i. Updates to the future salary increase assumption ii. Updates to assumed rates of retirement iii. Updates to the assumed rates of disability iv. Updates to assumed rates of withdrawal City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 143 GASB 67 Fiscal Year Ended 09/30/2020 09/30/2019 Notes to Schedule SCHEDULE OF CONTRIBUTIONS Last 2 Fiscal Years Contributions in relation to Actuarially the Actuarially Determined Determined Contribution Contributions $ 871,442 $ 912,459 $ 793,409 $ 793,815 Contributions as a Contribution percentage of Deficiency Covered Covered (Excess) Payroll Payroll $ (41,017) $ 2,866,586 31.83% $ (406) $ 2,793,692 28.41% Valuation Date: 10/01/2018 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates can be found in the October 1, 2018 Actuarial Valuation for the City of Sebastian Police Officers' Retirement System prepared by Foster & Foster Actuaries and Consultants. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 144 GASB 67 SCHEDULE OF INVESTMENT RETURNS Last 2 Fiscal Years Annual Money -Weighted Rate of Return Fiscal Year Ended Net of Investment Expense 09/30/2020 6.04% 09/30/2019 1.79% City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 145 NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30, 2020) Plan Description The Plan is a single -employer defined benefit pension plan administered by the Plan's Board of Trustees comprised of: a. Two City Council appointees, b. Two Members of the System, elected by the Membership, and c. Fifth Trustee elected by other 4 and appointed by City Council. Full-time employees who are classified as full-time sworn Police Officers participate in the System as a condition of employment. Plan Membership as of October 1, 2019: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 17 Inactive Plan Members Entitled to But Not Yet Receiving Benefits 11 Active Plan Members 41 69 Benefits Provided The Plan provides retirement, termination, disability and death benefits. A summary of the benefit provisions can be found in the October 1, 2019 Actuarial Valuation Report for the City of Sebastian Police Officers' Retirement System prepared by Foster & Foster Actuaries and Consultants. Contributions Member Contributions: 8% of Salary. City and State Contributions: Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, over a period not exceeding 30 years. Net Pension Liability The measurement date is September 30, 2020. The measurement period for the pension expense was October 1, 2019 to September 30, 2020. The reporting period is October 1, 2019 through September 30, 2020. The Sponsor's Net Pension Liability was measured as of September 30, 2020. The Total Pension Liability used to calculate the Net Pension Liability was determined as of that date. Actuarial Assumptions: The Total Pension Liability was determined by an actuarial valuation as of October 1, 2019 updated to September 30, 2020 using the following actuarial assumptions: Inflation 2.30% Salary Increases Service based Discount Rate 7.20% Investment Rate of Return 7.20% City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 146 Mortality Rate Healthy Active Lives: Female: PubS.H-2010 (Below Median) for Employees, set forward one year. Male: PubS.H-2010 (Below Median) for Employees, set forward one year. Mortality Rate Healthy Retiree Lives: Female: PubS.H-2010 for Healthy Retirees, set forward one year. Male: PubS.H-2010 (Below Median) for Healthy Retirees, set forward one year. Mortality Rate Beneficiary Lives: Female: PubG.H-2010 (Below Median) for Healthy Retirees. Male: PubG.H-2010 (Below Median) for Healthy Retirees, set back one year. Mortality Rate Disabled Lives: 80% PubG.H-2010 for Disabled Retirees / 20% PubS.H-2010 for Disabled Retirees. All rates are projected generationally with Mortality Improvement Scale MP-2018. The described mortality assumption rates were mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of assumptions used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in Milliman's July 1, 2019 FRS valuation report for special risk employees, with appropriate risk and collar adjustments made based on plan demographics. This assumption sufficiently accommodates future mortality improvements. The most recent actuarial experience study used to review the other significant assumptions was dated September 13, 2019. The Long -Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, Net of Pension Plan investment expenses and inflation) are developed for each major asset class. For 2020 the inflation rate assumption of the investment advisor was 1.80%. These ranges are combined to produce the Long -Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric real rates of return for each major asset class included in the Pension Plan's target asset allocation as of September 30, 2020 are summarized in the following table: Asset Class Domestic Equity International Equity Fixed Income Real Estate MLPs Total Target Allocation 52.50% 12.50% 25.00% 5.00% 5.00% 100.00% Long Term Expected Real Rate of Return' 5.33% 4.31 % 1.40% 4.80% 4.70% ' Source: Morgan Stanley. Based on secular annualized return and volatility estimates are based on a 20-year-plus time horizon. Please note that long term expected return of the total portfolio is greater than simply multiplying each of the above "Long Term Expected Real Rate of Returns" by their target allocation % and adding them together. Not only is the time horizon longer for an actuarial valuation relative to the time horizon over which the above projected returns were generated, but also there is an additional correlation resulting from a diversified portfolio that will provide additional returns. Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.20 percent. The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long -Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 147 CHANGES IN NET PENSION LIABILITY Balances as of September 30, 2019 Changes for a Year: Service Cost Interest Differences between Expected and Actual Experience Changes of assumptions Changes of benefit terms Contributions - Employer Contributions - State Contributions - Employee Net Investment Income Benefit Payments, including Refunds of Employee Contributions Administrative Expense Net Changes Balances as of September 30, 2020 Sensitivity of the Net Pension Liability to changes in the Discount Rate. Sponsor's Net Pension Liability Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a)-(b) $ 19,905,138 $ 15,814,119 $ 4,091,019 600,789 - 600,789 1,451,768 - 1,451,768 408,904 - 408,904 (447,786) - (447,786) - 703,814 (703,814) - 208,645 (208,645) - 229,327 (229,327) - 974,847 (974,847) (684,963) (684,963) - - (67,989) 67,989 1,328,712 1,363,681 (34,969) $ 21,233,850 $ 17,177,800 $ 4,056,050 Current Discount 1 % Decrease Rate 1 % Increase 6.20% 7.20% 8.20% $ 6,715,749 $ 4,056,050 $ 1,845,807 Pension Plan Fiduciary Net Position. Detailed information about the pension Plan's Fiduciary Net Position is available in a separately issued Plan financial report. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 148 PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS FISCAL YEAR SEPTEMBER 30, 2020 For the year ended September 30, 2020, the Sponsor will recognize a Pension Expense of $997,632. On September 30, 2020, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between Expected and Actual Experience 446,885 51,652 Changes of assumptions 353,382 373,155 Net difference between Projected and Actual Earnings on Pension Plan investments 561,007 - Total $ 1,361,274 $ 424,807 Amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in Pension Expense as follows: Year ended September 30: 2021 $ 299,985 2022 $ 389,666 2023 $ 224,788 2024 $ 28,508 2025 $ (6,480) Thereafter $ - City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 149 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 2 Fiscal Years Measurement date' 09/30/2020 09/30/2019 Total Pension Liability Service Cost 600,789 609,880 Interest 1,451,768 1,371,857 Changes of benefit terms - - Differences between Expected and Actual Experience 408,904 (25,912) Changes of assumptions (447,786) 22,520 Contributions - Buy Back - 52,749 Benefit Payments, including Refunds of Employee Contributions (684,963) (617,282) Net Change in Total Pension Liability 1,328,712 1,413,812 Total Pension Liability - Beginning 19,905,138 18,491,326 Total Pension Liability - Ending (a) $ 21,233,850 $ 19,905,138 Plan Fiduciary Net Position Contributions - Employer 703,814 595,045 Contributions - State 208,645 198,770 Contributions - Employee 229,327 223,495 Contributions - Buy Back - 52,749 Net Investment Income 974,847 276,498 Benefit Payments, including Refunds of Employee Contributions (684,963) (617,282) Administrative Expense (67,989) (82,476) Net Change in Plan Fiduciary Net Position 1,363,681 646,799 Plan Fiduciary Net Position - Beginning 15,814,119 15,167,320 Plan Fiduciary Net Position - Ending (b) $ 17,177,800 $ 15,814,119 Net Pension Liability - Ending (a) - (b) $ 4,056,050 $ 4,091,019 Plan Fiduciary Net Position as a percentage of the Total Pension Liability 80.90% 79.45% Covered Payroll $ 2,866,586 $ 2,793,692 Net Pension Liability as a percentage of Covered Payroll 141.49% 146.44% Notes to Schedule of Changes in Net Pension Liabilitv and Related Ratios ' Effective fo the City's fiscal year ending 09/30/2020, the GASB 68 measurement date of the Pension Expense has been approved and changed from 09/30/2019 to 09/30/2020. Changes of assumptions: For measurement date 09/30/2020, as mandated by Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the rates used in Milliman's July 1, 2019 FRS valuation report for special risk employees, with appropriate risk and collar adjustments made based on plan demographics. For measurement date 09/30/2019, amounts reported as changes of assumptions resulted of an Experience Study dated September 13, 2019, the Board approved the following changes: - The investment return assumption was decreased from 7.30% to 7.20% per year compounded annually, net of investment related expenses. - Based on a study of actual versus expected experience for the 10-year period ending September 30, 2018, the following changes to demographic assumptions were made: i. Updates to the future salary increase assumption ii. Updates to assumed rates of retirement iii. Updates to the assumed rates of disability iv. Updates to assumed rates of withdrawal City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 150 Fiscal Year Ended 09/30/2020 09/30/2019 Notes to Schedule SCHEDULE OF CONTRIBUTIONS Last 2 Fiscal Years Contributions in relation to Actuarially the Actuarially Determined Determined Contribution Contributions $ 871,442 $ 912,459 $ 793,409 $ 793,815 Contributions Contribution as a percentage Deficiency Covered of Covered (Excess) Payroll Payroll $ (41,017) $ 2,866,586 31.83% $ (406) $ 2,793,692 28.41% Valuation Date: 10/01/2018 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates can be found in the October 1, 2018 Actuarial Valuation for the City of Sebastian Police Officers' Retirement System prepared by Foster & Foster Actuaries and Consultants. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 151 EXPENSE DEVELOPMENT AND AMORTIZATION SCHEDULES The following information is not required to be disclosed but is provided for informational purposes. City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 152 COMPONENTS OF PENSION EXPENSE FISCAL YEAR SEPTEMBER 30, 2020 Beginning balance Total Pension Liability Factors: Service Cost Interest Changes in benefit terms Differences between Expected and Actual Experience with regard to economic or demographic assumptions Current year amortization of experience difference Change in assumptions about future economic or demographic factors or other inputs Current year amortization of change in assumptions Benefit Payments, including Refunds of Employee Contributions Net change Plan Fiduciary Net Position: Contributions - Employer Contributions - State Contributions - Employee Projected Net Investment Income Difference between projected and actual earnings on Pension Plan investments Current year amortization Benefit Payments, including Refunds of Employee Contributions Administrative Expenses Net change Ending Balance Net Pension Deferred Deferred Pension Liability Inflows Outflows Expense $ 4,091,019 $ 306,516 $ 1,363,125 $ - 600,789 - - 600,789 1,451,768 - - 1,451,768 408,904 - 408,904 - - (38,695) (107,497) 68,802 (447,786) 447,786 - - - (74,631) (188,881) 114,250 (684,963) - - - 1,328,712 334,460 112,526 2,235,609 703,814 - - - 208,645 - - - 229,327 - - (229,327) 1,152,615 - - (1,152,615) (177,768) - 177,768 - - (128,422) (204,398) 75,976 (684,963) - - - (67,989) - - 67,989 1,363,681 (128,422) (26,630) (1,237,977) $ 4,056,050 $ 512,554 $ 1,449,021 $ 997,632 City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 153 GASB 68 AMORTIZATION SCHEDULE - INVESTMENTS Increase (Decrease) in Pension Expense Arising from the Recognition of the of Differences Between Projected and Actual Earnings on Pension Plan Investments Differences Between Plan Year Projected and Actual Recognition Ending Earnings Period (Years) 2020 2021 2022 2023 2024 2025 2020 $ 177,768 5 $ 35,552 $ 35,554 $ 35,554 $ 35,554 $ 35,554 $ 2019 $ 844,232 5 $ 168,846 $ 168,846 $ 168,846 $ 168,846 $ $ 2018 $ (1,391) 5 $ (278) $ (278) $ (278) $ - $ - $ 2017 $ (435,953) 5 $ (87,191) $ (87,191) $ - $ $ - $ 2016 $ (204,764) 5 $ (40,953) $ - $ - $ $ $ Net Increase (Decrease) in Pension Expense $ 75,976 $ 116,931 $ 204,122 $ 204,400 $ 35,554 $ 2026 2027 2028 2029 2030 - $ City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 154 GASB 68 AMORTIZATION SCHEDULE - CHANGES OF ASSUMPTIONS Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Changes of Assumptions Plan Year Changes of Recognition Ending Assumptions Period (Years) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2020 $ (447,786) 6 $ (74,631) $ (74,631) $ (74,631) $ (74,631) $ (74,631) $ (74,631) $ $ $ $ $ 2019 $ 22,520 6 $ 3,753 $ 3,753 $ 3,753 $ 3,753 $ 3,753 $ $ $ $ $ $ 2017 $ 382,825 6 $ 63,804 $ 63,804 $ 63,804 $ - $ - $ $ - $ $ - $ - $ - 2016 $ 626,069 7 $ 89,438 $ 89,438 $ 89,438 $ - $ - $ - $ - $ $ - $ - $ - 2015 $ 223,200 7 $ 31,886 $ 31,886 $ - $ - $ - $ - $ - $ $ - $ - $ - Net Increase (Decrease) in Pension Expense $ 114,250 $ 114,250 $ 82,364 $ (70,878) $ (70,878) $ (74,631) $ - $ $ - $ - $ - City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 155 GASB 68 AMORTIZATION SCHEDULE - EXPERIENCE Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Differences between Expected and Actual Experience Differences Between Plan Year Expected and Actual Recognition Ending Experience Period (Years) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2020 $ 408,904 6 $ 68,149 $ 68,151 $ 68,151 $ 68,151 $ 68,151 $ 68,151 $ $ $ $ $ 2019 $ (25,912) 6 $ (4,319) $ (4,319) $ (4,319) $ (4,319) $ (4,319) $ - $ $ $ $ $ 2018 $ 164,601 6 $ 27,434 $ 27,434 $ 27,434 $ 27,434 $ $ $ - $ $ - $ $ 2017 $ 20,758 6 $ 3,460 $ 3,460 $ 3,460 $ - $ - $ - $ - $ $ - $ $ 2016 $ 59,175 7 $ 8,454 $ 8,454 $ 8,454 $ - $ - $ - $ - $ $ - $ $ 2015 $ (240,633) 7 $ (34,376) $ (34,376) $ - $ - $ $ $ - $ $ - $ $ Net Increase (Decrease) in Pension Expense $ 68,802 $ 68,804 $ 103,180 $ 91,266 $ 63,832 $ 68,151 $ $ $ $ $ City of Sebastian Police Officers' Retirement System FOSTER & FOSTER 156